AICPA CPA-Auditing Exam - Topic 2 Question 10 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 10
Topic #: 2

[All CPA-Auditing Questions]

An auditor may decide to decrease the acceptable level of risk when:

AIncreased reliability from the sample is desired.

BMany differences (audit value minus recorded value) are expected.

CInitial sample results do not support the planned level of control risk.

DThe cost and effort of selecting additional sample items is low.

Show Suggested Answer

Suggested Answer: D

Choice 'd' is correct. Decreasing the acceptable level of risk will result in a larger sample size, which the auditor might not want to do unless the cost and effort of selecting additional sample items is low.

Choice 'a' is incorrect. Decreasing the acceptable level of risk doesn't increase the reliability of a given sample. It does, however, result in selection of a larger sample, which in turn makes it less likely that the auditor will make an incorrect decision.

Choice 'b' is incorrect. The auditor's acceptable level of risk is not affected by the extent to which differences are expected.

Choice 'c' is incorrect. Control risk is not relevant in assessing the acceptable level of risk, which is a factor of substantive testing.

by Lavonda at May 09, 2022, 05:02 PM

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Frederica

4 months ago

I agree with A and C, they both seem crucial for accuracy!

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Donte

4 months ago

B is interesting, but it could lead to unnecessary work.

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Martha

4 months ago

Surprised that D is an option! Cost shouldn't be the only factor, right?

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Rory

4 months ago

I think C makes more sense, though. If the initial results are off, you gotta adjust.

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Scot

5 months ago

Definitely A! More reliability is always a good thing.

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Jaime

5 months ago

Option B looks like the most sensible approach to me. Strictly following government guidelines and taking appropriate precautions seems like the best way to manage the risk while keeping the business running.

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Kanisha

5 months ago

I'm pretty confident about this one. Attribute and variable data are the two main types used in statistical analysis, so the answer is True.

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Glory

5 months ago

This really has me second-guessing. I remember studying redirect strategies, but I can't quite connect that to the STIX here.

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Deonna

5 months ago

I'm not totally sure about this one. The requirements seem a bit tricky, and I'm not 100% confident in my OSPF area configuration knowledge. I'll need to review my notes and maybe ask the instructor for some clarification before attempting to answer.

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Thaddeus

5 months ago

Okay, let me see. I'm guessing it's because a thin client has no processor of its own, and instead uses the processing power of the server. That would make it 'thin' in terms of hardware requirements.

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