26

. If permission from the client to discuss its affairs with the proposed auditor is denied by the client,
  the predecessor auditor should:
  A. Keep silent of the denial.          
  B. Disclose the fact that the permission to disclosure is denied by the client.  
  C. Disclose adequately to proposed auditor all noncompliance made by the client.  
  D. Seek legal advice before responding to the proposed auditor.      
                         
27
. According to PSA 10, the auditor and the client should agree on the terms of the engagement. The
  agreed terms would need to be recorded in a (n)
  A. Memo placed in the permanents ection of the working paper.    
  B. Client representation letter.          
  C. Engagement letter.            
  D. Comfort letter.              
                         
28
. An engagement letter is best described as        
  A. A letter from the company to the auditors specifying management's expectations for
    completion of the audit on a timely basis and the fees.
  B. A letter from the auditors to company management specifying that management is
responsible for the financial statements, and the auditors will issue an opinion on the
    financial statements.
  C. A letter from the auditors to company management that specifies the responsibilities of
both the company and the auditors in completimh the audit and the timing for its
    completion.
  D. A letter from the Board of Directors' audit committee to the auditor that indicates the
    auditor has been engaged to perform the audit and the fees to be paid.
                         
29
. An engagement letter is prepared with the interests of      
  A. The auditor only              
  B The client only              
  C. The public                
  D. Both the client and the auditor          
                         
30
. Engagement letters are widely used in practice for        
  A. Professional engagements of all types        
  B Assurance engagements only          
  C. Related services only          
  D. Audits only