An auditor is required to establish an understanding with a client regarding the services to be performed for each engagement. This understanding generally includes
a. Management’s responsibility for errors and the illegal activities of employees that may cause material misstatement.
b. The auditor’s responsibility for ensuring that the audit committee is aware of any significant deficiencies in internal control that come to the auditor’s attention.
c. Management’s responsibility for providing the auditor with an assessment of the risk of material misstatement due to fraud.
d. The auditor’s responsibility for determining preliminary judgments about materiality and audit risk factors.
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