7. Which of the following would cause you the most concern about accepting an engagement?

The existence of related party transactions

Excessive turnover in the accounting department

A large percentage of the potential clients income is generated overseas

The internal auditors report to the controller

8.Which of the following would cause you least concern when deciding to accept an audit engagement?

The potential clients loss of a major customer

The existence of related party transactions

A substantial decrease in the price of the potential clients stock

A trend of decreased cash flow

15. Which of the following is least likely to be considered a risk assessment procedure?

confirmation of ending accounts receivable

analytical procedures

inspection of documents

observation of the performance of certain accounting procedures