AICPA Exam CPA-Auditing 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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Rolland

14 days 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

1 days ago

D) Sales returns.

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Leonardo

19 days 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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Freeman

1 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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Dick

20 days 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.

upvoted 0 times