AICPA CPA-Auditing Exam - Topic 1 Question 85 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 85
Topic #: 1

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:

APurchase discounts.

BPurchase returns.

CSales.

DSales returns.

Show Suggested 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.

by Pearly at Apr 23, 2024, 09:23 AM

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Sabina

3 months ago

Not so sure about that, could also be sales discrepancies.

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Linwood

3 months ago

Agree, purchase returns make the most sense here.

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Asuncion

3 months ago

Wait, how can test counts be higher? That seems off.

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Evangelina

4 months ago

I think it's more likely related to sales returns.

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Tiera

4 months ago

This could definitely be due to unrecorded purchase returns.

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Mauricio

4 months ago

I’m a bit confused about this one. I thought sales returns would decrease inventory, not increase it. So, I’m not sure if D is relevant here.

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Ilene

4 months ago

This reminds me of a practice question where we had to identify discrepancies in inventory. I think purchase discounts could be a factor too, but I'm leaning towards purchase returns.

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Benton

4 months ago

I'm not entirely sure, but I feel like sales could also impact inventory counts. If sales aren't recorded, it might show higher inventory levels.

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Argelia

5 months ago

I remember discussing how unrecorded purchase returns could lead to inflated inventory counts. So, I think option B might be the right answer.

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Lorrine

5 months ago

I'm feeling a little confused here. Is this about inventory valuation or just inventory record-keeping? I want to make sure I'm approaching this from the right angle. Maybe I should re-read the question a few times to make sure I'm not missing anything.

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Tomoko

5 months ago

Okay, I've got this. The key is to identify what the client failed to record, which would lead to the test counts being higher than the perpetual records. Based on the options, I think the answer is sales returns.

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Leana

5 months ago

This seems like a straightforward inventory question. I'll carefully review the details and think through the possible reasons for the discrepancy between the test counts and the perpetual records.

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Laura

5 months ago

Hmm, I'm a bit unsure about this one. I need to make sure I understand the difference between purchase discounts, purchase returns, sales, and sales returns. Let me re-read the question and options carefully.

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Ranee

5 months ago

I'm pretty confident that the answer is option B. The output shows that Shadow Clones are currently disabled, so the administrator needs to use the acluster edit-params command to enable them.

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Jeannetta

5 months ago

Hmm, I'm not sure about this one. I know a /31 subnet is a bit unusual, but I can't quite remember all the details. I'll have to think it through carefully.

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Tula

5 months ago

This is a tricky one. I'll need to think through how adding new requirements halfway through would impact the project triangle.

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Matilda

5 months ago

I feel like Sysinternals Autoruns was mentioned in a similar context, but I can't recall if it's the right tool for this question.

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Mari

5 months ago

This seems like a tricky one. I'll need to think through the different options carefully.

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Rolland

9 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

8 months ago

It's important for auditors to pay close attention to these details during inventory audits.

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Bettye

8 months ago

Definitely, sales returns can cause discrepancies in inventory counts.

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Bettye

9 months ago

D) Sales returns.

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Leonardo

9 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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Brianne

8 months ago

It's important for the client to accurately record all transactions to avoid these kinds of issues.

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Craig

8 months ago

Yeah, that would explain the discrepancy between the test counts and the perpetual records.

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Ashanti

8 months ago

I agree, option D makes the most sense. The client probably forgot to record the sales returns.

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Freeman

10 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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Herminia

8 months ago

I'm sticking with sales returns. It just seems like the most logical explanation for the discrepancy.

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Cathern

8 months ago

I see your point, but I still think it's purchase returns. It seems more likely in this scenario.

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Ryan

8 months ago

I disagree, I believe it's sales returns. That would explain the higher test counts.

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Remona

8 months 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

8 months 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 months 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

9 months ago

I think it could be purchase returns. Those could have been missed in the perpetual records.

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Flo

10 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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