Which of the following is least important to the auditor when investigating a potential new audit client?
A) The audit committee does not have the requisite number of independent members or financial experts.
B) The company has experienced recent operating losses and other financial difficulties.
C) The company has a highly decentralized organizational structure.
D) The company has experienced high turnover rates among management or members of the accounting, internal audit, or IT staff.

Question

Quizplus · Accepted Answer

While all of the options could potentially impact the auditor's likelihood of accepting a new audit client, option C (decentralized organizational structure) is generally considered to be the least important. The other options directly relate to the financial stability, integrity, and oversight of the company, which are all critical considerations for the auditor. However, a decentralized structure alone does not necessarily make a company less suitable for an audit engagement.

Which of the Following Is Least Important to the Auditor