AICPA Exam CPA-Auditing Topic 1 Question 87 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 87
Topic #: 1

Which of the following procedures should an auditor generally perform regarding subsequent events?

ACompare the latest available interim financial statements with the financial statements being audited.

BSend second requests to the client's customers who failed to respond to initial accounts receivable confirmation requests.

CCommunicate material weaknesses in the internal control structure to those charged with governance.

DReview the cut-off bank statements for several months after the year-end.

Show Suggested Answer

Suggested Answer: A

Choice 'a' is correct. An auditor's communication of internal control related matters noted in an audit usually should be addressed to management and those charged with governance.

Choices 'b', 'c', and 'd' are incorrect. The director of internal auditing, the chief financial officer, and the chief accounting officer all would have access to the letter; however, it would not be addressed to them since they do not have the same level of authority and responsibility to the shareholders as management and those charged with governance.

by Barrie at May 10, 2024, 03:45 PM

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Elke

2 months ago

Subsequent events? More like 'subsequent shenanigans,' am I right? Better have those bank statements on lockdown, folks!

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Eliz

25 days ago

D) Review the cut-off bank statements for several months after the year-end.

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Earnestine

28 days ago

C) Communicate material weaknesses in the internal control structure to those charged with governance.

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Rikki

1 months ago

B) Send second requests to the client's customers who failed to respond to initial accounts receivable confirmation requests.

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Mee

1 months ago

A) Compare the latest available interim financial statements with the financial statements being audited.

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Kara

2 months ago

Hmm, Option C is interesting, but it's more about communicating control weaknesses, not subsequent events. Gotta keep our eye on the ball here, folks.

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Leontine

21 days ago

D) Review the cut-off bank statements for several months after the year-end.

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Annalee

23 days ago

B) Send second requests to the client's customers who failed to respond to initial accounts receivable confirmation requests.

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Justine

1 months ago

A) Compare the latest available interim financial statements with the financial statements being audited.

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Wynell

3 months ago

Hold up, why are we even considering Option B? That's more for the confirmation process, not subsequent events. This is a no-brainer - Option D all the way!

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Dean

1 months ago

Let's focus on what's necessary for subsequent events. Option D is the best choice for the auditor to perform.

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Pearly

1 months ago

Yeah, Option D is more relevant to subsequent events. It's important to review the cut-off bank statements.

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Carrol

1 months ago

Definitely, Option D is the best choice for ensuring we cover all our bases with subsequent events.

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Sherell

2 months ago

Yeah, Option D makes the most sense for subsequent events. It's all about reviewing those bank statements.

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Tanesha

2 months ago

I agree, Option B seems out of place here. Option D is definitely the way to go.

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Mary

2 months ago

I agree, Option B seems out of place here. Option D is definitely the way to go.

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Glenna

3 months ago

I'm not sure about that. Comparing the latest interim financial statements with the audited ones (Option A) seems like a more comprehensive approach to subsequent events.

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Vanda

1 months ago

True, it's all about making sure we have a complete picture of the company's financial situation.

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Iola

1 months ago

Sending second requests to customers who didn't respond to initial confirmation requests could also be important.

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Timmy

2 months ago

Yeah, that way we can see if there are any significant changes that need to be addressed.

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Janine

2 months ago

I think comparing the latest interim financial statements with the audited ones is a good idea.

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Nobuko

3 months ago

Option D seems like the obvious choice here. Reviewing the cut-off bank statements is crucial for identifying any subsequent events that could impact the financial statements.

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Quentin

2 months ago

User 2: Definitely, it's a key procedure to ensure the financial statements are accurate.

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Maile

3 months ago

User 1: I agree, reviewing the cut-off bank statements is important for catching any new events.

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Salley

3 months ago

I believe reviewing the cut-off bank statements for several months after the year-end is also crucial to detect any potential errors or fraud.

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Meghan

3 months ago

I agree with Kathryn. It's important to ensure consistency and accuracy in the financial statements.

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Kathryn

4 months ago

I think the auditor should compare the latest available interim financial statements with the financial statements being audited.

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