Discuss AICPA CPA-Auditing Exam Topic 2 Question 128

Which of the following is true regarding the auditor's responsibility to report on information accompanying the basic financial statements in a client-prepared document?

AThe auditor may report on information accompanying the basic financial statements in a clientprepared document only if he or she has been specifically engaged to do so.

BThe auditor is required to express an opinion on whether information accompanying the basic financial statements in a client-prepared document is fairly stated in all material respects in relation to the financial statements taken as a whole.

CIf an auditor chooses to report on information accompanying the basic financial statements in a clientprepared document, the report should include a description of the character of the audit work performed.

DIf an auditor chooses to report on information accompanying the basic financial statements in a clientprepared document, the report should include an opinion on the information but should not describe the character of the audit work performed.

Suggested Answer: C

Choice 'c' is correct. If an auditor chooses to report on information accompanying the basic financial statements in a client-prepared document, the report should include a description of both the character of the audit work performed and the degree of responsibility assumed.

Choice 'a' is incorrect. There is no requirement that the auditor be specifically engaged to report on such information. If auditing procedures have been applied to the information, the auditor is permitted to report thereon.

Choice 'b' is incorrect. The auditor is permitted but not required to report on such information.

Choice 'd' is incorrect. If an auditor chooses to report on information accompanying the basic financial statements in a client-prepared document, the report should include an opinion on the information and a description of both the character of the audit work performed and the degree of responsibility assumed.

Get Premium CPA-Auditing Questions as Interactive Web-Based Practice Test or PDF Real Exam Format Detailed Explanations Instant Access Get Your Practice Test

12 comments · newest first

Staci 2 months ago

A seems too limiting. Auditors should have flexibility in reporting.

Lura 2 months ago

I agree, but C makes sense too. Describing the audit work is important.

Georgene 2 months ago

I think B is the right answer. It's about fairness in reporting.

Terry 2 months ago

C is correct, they should describe the audit work if they report.

Kenneth 2 months ago

B seems off, how can they be required to express an opinion?

Colette 2 months ago

Wait, I thought they always had to describe the audit work?

Jerlene 3 months ago

Totally agree, it’s all about the engagement!

Audria 3 months ago

A) is true, they need to be specifically engaged.

Noble 3 months ago

I’m confused about D; I thought they always had to describe the audit work if they report on additional information. It seems contradictory.

Emiko 3 months ago

I practiced a question similar to this, and I think C makes sense because auditors often describe their work when providing additional reports.

Denae 3 months ago

I'm not entirely sure, but I feel like B sounds too strong. I thought they only needed to report if they were engaged for that purpose.

Mattie 4 months ago

I remember that auditors usually need a specific engagement to report on additional information, so I think A might be correct.

AICPA CPA-Auditing Exam - Topic 2 Question 128 Discussion