[Anonymous]

Came across the following question in Ninja:

Davis, CPA, accepted an engagement to audit the financial statements of Tech Resources, a nonpublic entity. Before the completion of the audit, Tech requested Davis to change the engagement to a compilation of financial statements. Before Davis agrees to change the engagement, Davis is required to consider the:

I. additional audit effort necessary to complete the audit.

II. reason given for Tech’s request.

Correct answer is to consider both. I know auditor has to consider client’s reasoning for change, cost and effort to perform client’s ask….but why would auditor consider additional audit effort to complete the audit when client asked to switch to compilation?

[Peterman25]

Because you may already have the resources lined up and ready to go….if you switch you have idle resources….

You may be far enough into the process where the cost/benefit makes sense to just complete the audit…

There may be another reason or 2 that I am not remembering..

BEC 7/14 - PASS
FAR 10/14 - PASS
AUD 1/15 - PASS
REG 4/15 - PASS

AZ license - Official 8/20/2015

[Anonymous]

Ah that make sense, thanks!

[Author]

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