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AICPA Exam CPA-Auditing Topic 1 Question 85 Discussion

Actual exam question for AICPA's CPA-Auditing exam
Question #: 85
Topic #: 1
[All CPA-Auditing Questions]

While observing a client's annual physical inventory, an auditor recorded test counts for several items and noticed that certain test counts were higher than the recorded quantities in the client's perpetual records.

This situation could be the result of the client's failure to record:

Show Suggested Answer Hide Answer
Suggested Answer: A

Choice 'a' is correct. In microcomputer audit applications, efficient and effective system usage requires:

(1) identification of the appropriate audit tasks and

(2) appropriate software to perform the selected audit tasks.

Choice 'b' is incorrect. Although microcomputer access to client data is desirable, it is not required.

Choice 'c' is incorrect. Although microcomputer access to client data is desirable, it is not required. Also, microcomputer audit applications need not be applicable to several clients to be efficient and effective.

Choice 'd' is incorrect. Microcomputer audit applications need not be applicable to several clients to be efficient and effective.


Contribute your Thoughts:

Rolland
1 months ago
Option D, sales returns, is the correct answer. The question is pretty straightforward, and the wording points us in that direction. Gotta love those inventory audits, am I right?
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Bettye
18 days ago
D) Sales returns.
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Leonardo
1 months ago
Haha, I bet the client's accountant was like, 'Wait, where did all these extra items come from?' Option D is the clear winner here.
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Ashanti
2 days ago
I agree, option D makes the most sense. The client probably forgot to record the sales returns.
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Freeman
2 months ago
I'm going with option D. Sales returns. It's the only one that makes sense in the context of the question. The other options just don't seem relevant to the situation at hand.
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Ryan
3 days ago
I disagree, I believe it's sales returns. That would explain the higher test counts.
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Remona
5 days ago
I'm not sure about purchase returns. I think it might be sales returns because that would also result in higher test counts than recorded quantities.
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Ressie
6 days ago
I agree with you, purchase returns could definitely be a possibility. It would explain the discrepancies in the test counts.
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Jerlene
9 days ago
I think it could be purchase returns. Maybe the client forgot to update the records when items were returned.
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Dick
1 months ago
I think it could be purchase returns. Those could have been missed in the perpetual records.
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Flo
2 months ago
Hmm, the client's failure to record sales returns seems like the most logical explanation here. That would definitely result in the test counts being higher than the perpetual records.
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Tammara
1 months ago
It's important for the client to accurately record all transactions to ensure the accuracy of their financial statements.
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Candida
1 months ago
I agree, not recording sales returns would definitely cause discrepancies in the inventory counts.
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Peggie
2 months ago
I disagree. I think the answer is D) Sales returns. Maybe the client didn't properly record the returns from sales transactions.
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Gilma
2 months ago
I agree with Shizue. If the test counts were higher than recorded quantities, it could be due to missing purchase returns.
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Shizue
3 months ago
I think the answer is B) Purchase returns.
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