AAA – Nov 2013 – L3 – A – Q8 – Forensic Auditing

This question assesses knowledge of the terms of reference that should be agreed upon by the investigating accountant with the client.

Question

The terms of reference to be agreed by the investigating accountant with the client before commencement of work do NOT include the
A. Organisational and management structure of the entity to be investigated
B. Purpose of the investigation
C. Basis on which fees will be charged
D. General scope of work to be covered
E. Time within which the assignment will be carried out

Answer

A. Organisational and management structure of the entity to be investigated

Explanation:
The organisational and management structure of the entity to be investigated is not typically part of the agreed-upon terms of reference for an investigative engagement. Terms of reference usually focus on clarifying the purpose, scope, fees, and timing of the assignment to ensure mutual understanding between the accountant and the client. The structure of the entity is more relevant to the context of the investigation rather than the terms of reference.

Tags: Client Agreement, Forensic Auditing, Investigation, Terms of Reference
Level: Level 3

Topic: Forensic Auditing
Series: NOV 2012

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