AICPA Exam CPA-Auditing Topic 1 Question 92 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 92
Topic #: 1

Which of the following statements concerning an auditor's communication of significant deficiencies identified during the audit of a nonissuer is correct?

AThe auditor should request a meeting with management one level above the source of the significant deficiencies to discuss suggestions for remedial action.

BAny report issued on significant deficiencies should indicate that providing assurance on internal control was not the purpose of the audit.

CSignificant deficiencies discovered and communicated at an interim date should be reexamined with tests of controls before completing the engagement.

DSuggestions concerning administration efficiencies and business strategies should not be communicated in the same report with significant deficiencies.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. Any report issued on significant deficiencies should indicate that providing assurance on internal control was not the purpose of the audit.

Choice 'a' is incorrect. The auditor should communicate significant deficiencies to management and those charged with governance, but is not required to request a meeting with management one level above the source of the reportable conditions, to discuss suggestions for remedial action.

Choice 'c' is incorrect. Significant deficiencies discovered and communicated at an interim date do not need to be reexamined with tests of controls before completing the engagement.

Choice 'd' is incorrect. Suggestions concerning administration efficiencies and business strategies may be communicated in the same report with significant deficiencies (the significant deficiencies must be separately identified, however).

by Wenona at Jul 11, 2024, 04:37 PM

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Dominga

11 months ago

Ooh, this is a tricky one. I'm going to have to go with C, just to be safe. Can't be too careful with those significant deficiencies, you know?

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King

10 months ago

Definitely, it's crucial to take the necessary steps to ensure accuracy and reliability in the audit process.

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Noah

10 months ago

I agree, it's better to be safe than sorry when it comes to addressing significant deficiencies.

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Brittni

10 months ago

I think C is a good choice. It's important to reexamine significant deficiencies with tests of controls.

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Sheron

11 months ago

I agree with Carmelina, A seems like the right choice for effective communication.

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Carmelina

11 months ago

But A makes sense because discussing suggestions for remedial action is important.

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Ciara

11 months ago

Haha, this question is a real head-scratcher. I'm just going to go with A and hope the auditor can work some magic with management!

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Carla

11 months ago

D is a bit strange. Why wouldn't the auditor communicate suggestions for business strategies along with significant deficiencies? Seems like valuable feedback.

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Annabelle

10 months ago

D) Suggestions concerning administration efficiencies and business strategies should not be communicated in the same report with significant deficiencies.

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Clare

10 months ago

C) Significant deficiencies discovered and communicated at an interim date should be reexamined with tests of controls before completing the engagement.

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Blair

10 months ago

B) Any report issued on significant deficiencies should indicate that providing assurance on internal control was not the purpose of the audit.

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Estrella

10 months ago

A) The auditor should request a meeting with management one level above the source of the significant deficiencies to discuss suggestions for remedial action.

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Craig

11 months ago

I disagree, I believe it's B.

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Carmelina

11 months ago

I think the correct statement is A.

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Denny

11 months ago

C seems like the right choice to me. The auditor should reexamine any significant deficiencies found at an interim date before completing the engagement.

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Sheridan

12 months ago

I think B is the correct answer. The auditor should make it clear that the audit's purpose was not to provide assurance on internal control.

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Sherly

10 months ago

D) Suggestions concerning administration efficiencies and business strategies should not be communicated in the same report with significant deficiencies.

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Shannon

10 months ago

C) Significant deficiencies discovered and communicated at an interim date should be reexamined with tests of controls before completing the engagement.

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Tamala

10 months ago

B) Any report issued on significant deficiencies should indicate that providing assurance on internal control was not the purpose of the audit.

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Dahlia

11 months ago

A) The auditor should request a meeting with management one level above the source of the significant deficiencies to discuss suggestions for remedial action.

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