Day: August 29, 2025

Accounting Multiple Choice Question – 29 August 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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For each of the following statements, select whether they are true or false in respect of the audit engagement letter.

Statement 1 – The engagement letter should be sent before acceptance of the appointment.
Statement 2 – The engagement letter should be sent after the appointment of the auditor but before the commencement of the audit.
Statement 3 – The engagement letter should be sent after the start of the audit but before the signing of the auditor’s report.
Statement 4 – An engagement letter should be sent to all new clients.

Identify whether the statements made above are true or false?

Select ONE answer:

  1. Statement 1. True and Statement 2. False and Statement 3. False and Statement 4. True
  2. Statement 1. True and Statement 2. False and Statement 3. False and Statement 4. False
  3. Statement 1. False and Statement 2. True and Statement 3. False and Statement 4. True
  4. Statement 1. True and Statement 2. False and Statement 3. True and Statement 4. False

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct == >    The engagement letter is essentially the contract between the client and the auditor and therefore, should be sent to all clients. It confirms acceptance of the appointment by the auditor, so it must be issued after acceptance but before work is commenced.
  4. Not correct

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