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AICPA CPA-Auditing Exam - Topic 1 Question 101 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 101
Topic #: 1

[All CPA-Auditing Questions]

Negative assurance may be expressed when an accountant is requested to report on the:

ACompilation of prospective financial statements.

BCompliance with the provisions of the Foreign Corrupt Practices Act.

CResults of performing a review of management's assertion.

DAudit of historical financial statements.

Show Suggested Answer

Suggested Answer: A

Choice 'a' is correct. An auditor is required to communicate certain matters to those charged with governance, including disagreements with management about significant audit adjustments, whether or not satisfactorily resolved.

Choice 'b' is incorrect. Written communications should include a limitation on the use of the communication.

Choice 'c' is incorrect. The auditor is not required to distribute the report to management, especially since certain matters might be inappropriate for discussion with management.

Choice 'd' is incorrect. The auditor is not required to make the communication before the auditor's report on the financial statements is finalized, as long as the communication occurs on a timely basis. (Note, however, that for audits of issuers, the communication must be made before the auditor's report is filled with the SEC.)

by Sarina at Sep 19, 2024, 12:29 PM

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Maurine

7 months ago

I thought negative assurance was only for compliance issues.

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Myra

8 months ago

Definitely not for audits, that’s a different level of assurance.

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Cammy

8 months ago

Wait, can you really give negative assurance on prospective statements?

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Fernanda

8 months ago

Totally agree, it’s about management's assertions!

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Fidelia

8 months ago

Negative assurance is related to reviews, not audits.

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Nicholle

9 months ago

I’m confused about the difference between compilation and review engagements. I guess I’ll have to go with C, but I’m not completely confident.

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Felice

9 months ago

I feel like I’ve seen a question like this before, and I think it was about compliance, but I can’t recall if it was specifically the Foreign Corrupt Practices Act.

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Carli

9 months ago

I remember studying that negative assurance isn’t used for audits, so D seems wrong, but I’m not entirely sure about the other options.

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Refugia

9 months ago

I think negative assurance is related to reviews, so I’m leaning towards option C about management's assertions.

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Josphine

9 months ago

Ah, I remember this from class. Negative assurance is when the accountant reports that nothing came to their attention that would indicate a problem, rather than providing a positive opinion. I'm pretty confident the answer is C - reporting on the results of a management assertion review.

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Gail

9 months ago

Okay, let me see... Negative assurance is when the accountant reports on the absence of certain issues, right? I think it's related to reviewing management's assertions, but I'm not 100% sure. I'll make an educated guess and see how it goes.

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William

9 months ago

Hmm, I'm a little unsure about this one. I know negative assurance has to do with the accountant's report, but I can't quite remember the specific situations where it's used. I'll have to think this through carefully.

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Stephane

9 months ago

This seems like a pretty straightforward question about the types of assurance an accountant can provide. I'm pretty confident I know the answer, but I'll quickly review the key concepts just to be sure.

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Kandis

1 year ago

Ooh, this is a tough one. I'm going to go with option C, but I'm keeping my fingers crossed. Negative assurance is like a superpower - it's all about what you don't say.

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Tori

1 year ago

User1: Let's hope we're right with our choice. Fingers crossed for option C!

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Katy

1 year ago

User3: I agree, negative assurance is like a superpower. Option C is the way to go.

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Adelle

1 year ago

User2: Yeah, it's all about what you don't say. Option C seems like the best fit.

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Alisha

1 year ago

User1: I think negative assurance is tricky, but I'm leaning towards option C too.

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Samira

1 year ago

Haha, I bet the test-makers are trying to trip us up with these answer choices. Negative assurance? More like negative energy, am I right?

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Skye

1 year ago

Hmm, this is a tricky one. I was leaning towards option B, but now I'm not so sure. The Foreign Corrupt Practices Act seems a bit too specific for negative assurance.

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Dahlia

1 year ago

I think option C is the correct answer here. Negative assurance is typically used when reporting on the results of a review rather than a full audit.

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Joanne

1 year ago

Yes, option C is the most appropriate choice for expressing negative assurance in this scenario.

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Santos

1 year ago

I agree, negative assurance is often provided after a review rather than an audit.

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Shawna

1 year ago

I'm not sure, but I think it could also be C, since a review of management's assertion may also involve expressing negative assurance.

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Chau

1 year ago

I agree with Kathrine, because negative assurance is usually provided in an audit of historical financial statements.

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Kathrine

1 year ago

I think the answer is D.

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