Under GAAS,which of the following is an appropriate justification for accepting to perform an audit when the risk to the auditor from accepting the engagement is high?
A)The auditor believes that the audit risk can be reduced to a very low level by performing extensive audit work.
B)The auditor believes the risk of material misstatement remains low.
C)The auditor has assessed control risk as low.
D)The auditor believes the high audit fee outweighs the risk of legal liability from association with the financial statements

Question

Quizplus · Accepted Answer

According to GAAS, the auditor may accept an audit engagement when the risk to the auditor from accepting the engagement is high, provided that the auditor believes that the audit risk can be reduced to a very low level by performing extensive audit work. This justification ensures that the audit is conducted with due care and diligence, and minimizes the risk of an audit failure. Therefore, choice letter A is the appropriate justification for accepting to perform an audit when the risk to the auditor is high. Choice letter B is not relevant as it does not address the risk to the auditor. Choice letter C is not applicable as control risk is a client-specific matter and does not relate to the risk to the auditor. Choice letter D is incorrect as the auditor should not base the decision to accept an engagement solely on the audit fee but rather on the potential risks and benefits to the auditor and the public.

Under GAAS,which of the Following Is an Appropriate Justification for Accepting