QUESTION 21 ABC Electric (ABC) entered into an agreement with AB Audit Firm (AB), for AB to perform external audit services. AB delayed issuing the audit report for three months, violating the terms of the agreement with ABC. ABC sues AB for fraud. The fraud lawsuit by ABC is justified under this circumstance. O True O False QUESTION 22 An external auditor's assessment shows that inherent risk as well as control risk are high. In order to keep the audit risk at an acceptable level, the external auditor has to ensure that professionals with high levels of experience and skills are assigned to the audit. O True O False QUESTION 23 An identified user is a specific third party named in the audit engagement letter as a user of the audited financial statements. O True O False QUESTION 24 Tizzy Enterprise (Tizzy) is a new audit client. In obtaining an understanding of the operations of Tizzy, the external auditor noted that a prior year investigation report revealed the presence of an incentive to commit fraud, the opportunity to commit fraud and the rationalization to commit fraud. The investigation report was inconclusive. The external auditor concluded that the presence of the fraud factors does not necessarily mean that fraud occurred. This is an accurate statement. O True O False QUESTION 25 Control activities may be implemented both at the organizational level and at the transaction level. O True O False