The following questions deal with client acceptance, audit planning, and materiality. Choose the best response.

a. Which of the following procedures would a CPA least likely perform during the planning stage of the audit?

1.

Determine the effect of information technology on the audit

2.

Take a tour of the client's facilities

3.

Perform inquiries of outside legal counsel regarding pending litigation

4.

Determine the timing of testing

b. A successor auditor's inquiries of the predecessor auditor should include questions regarding

1.

the assessment of the objectivity of the client's internal audit function.

2.

the number of engagement personnel the predecessor assigned to the engagement.

3.

the response rate for confirmations of accounts receivable.

4.

communications to management and those charged with governance regarding significant deficiencies in internal control.

c. In which of the following circumstances would an auditor of an issuer be least likely to reevaluate established materiality levels?

1.

The materiality level was established based on preliminary financial statement amounts that differ significantly from actual amounts.

2.

The client released third-quarter results before the SEC-prescribed deadline.

3.

Significant new contractual arrangements draw attention to a particular aspect of a client's business that is separately disclosed in the financial statements.

4.

The client disposed of a major portion of the client's business.