AICPA Exam CPA-Auditing Topic 3 Question 73 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 73
Topic #: 3

Which of the following is not a required procedure in an engagement to review the interim financial information of a publicly held entity?

AObtaining corroborating evidence about the entity's ability to continue as a going concern.

BComparing disaggregated revenue data for the current interim period with that of comparable prior periods.

CObtaining evidence that the interim financial information reconciles with the accounting records.

DInquiring of management about their knowledge of fraud or suspected fraud.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. A report on internal control related matters noted in an audit should not state that there are no significant deficiencies in internal control, since this statement might erroneously imply that the auditor searched for such conditions.

Choice 'a' is incorrect. The auditor is permitted to state that no material weaknesses were identified during the audit. Typically this occurs in reports submitted to governmental authorities.

Choice 'c' is incorrect. The auditor may suggest that corrective follow-up action should be taken due to the relative significance of material weakness discovered.

Choice 'd' is incorrect. The auditor's report may state that his or her consideration of internal control would not necessarily disclose all significant deficiencies that exist.

by Helaine at Aug 06, 2023, 11:57 PM

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Louisa

1 months ago

Wait, so we're not even supposed to check if the company might go bankrupt? That's like having a doctor do a checkup without checking your vital signs. Sounds like a recipe for disaster to me.

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Lakeesha

18 days ago

A) Obtaining corroborating evidence about the entity's ability to continue as a going concern.

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I disagree, I believe the answer is D) Inquiring of management about their knowledge of fraud or suspected fraud.

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Christiane

3 months ago

I think the answer is A) Obtaining corroborating evidence about the entity's ability to continue as a going concern.

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