3. Preliminary arrangements agreed to by the auditors and the client are usually stipulated in a. A memorandum of understanding to be placed in the permanent file of the auditing working papers b. An engagement letter. c. A client representation letter. d. A confirmation letter sent to the client 24. Which of the following constitutes a consistency issue? a. A change in the salvage value of a fixed asset. b. An error in sales in the previous period which has been corrected via a prior-period adjustment. c. A change from percentage of completion method to the completed contract method d. A change in the estimate for uncollectible accounts expense from one percent to two percent of net sales. 25. Which of the following circumstances generally results in the issuance of a report for a public company that is other than unqualified? a. Circumstances have significantly limited the scope of the auditors procedures. b. In a group audit, the principal auditors for the engagement are relying on the work of other auditors. II client c. The financial statements depart from a standard established by the FASB because the and the auditors have concluded that in this situation application of the GAAP standard would result in materially misleading financial statements d. The auditors have decided to emphasize the fact that the company has engaged in material amounts odf related party transactions. 26. If the auditors make no reference to other auditors whose work they have relied on, in a group audit as a part of the basis for their report, the principal auditors: a. Are not required to investigate the professional reputation of the other auditors b. Are issuing an inappropriate report. c. Are assuming responsibility for the work of the other auditors. d. Are issuing a qualified opinion