Question 1
If an auditor believes the client will have financial difficulties after the audit report is issued, and external users will be relying heavily on the financial statements, the auditor will probably set acceptable audit risk as low.
◦ true
◦ false
Question 2
In assessing management integrity for potential new audit clients, the auditor should examine the prospective client's standing in the business community, financial stability, and relations with its previous CPA firm, among other procedures.
◦ true
◦ false