Where there is a significant change in ownership of the company, ISA 210 Agreeing the Terms of Audit Engagements recommends that a new audit engagement letter is sent to avoid misunderstandings.

Statement (ii) is wrong as it reflects the common misconception that the shadow price is the maximum price which should be paid, rather than the maximum extra over the current purchase price.

Statement (iii) is wrong but could be thought to be correct if (ii) was wrongly assumed to be correct.