AICPA CPA-Auditing Exam - Topic 2 Question 35 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 35
Topic #: 2

Which of the following is a documentation requirement that an auditor should follow when auditing in accordance with Government Auditing Standards?

AThe auditor should obtain written representations from management acknowledging responsibility for correcting instances of fraud, abuse, and waste.

BAudit documentation should contain sufficient information so that supplementary oral Explanation: s are not required.

CThe auditor should document the procedures that assure discovery of all illegal acts and contingent liabilities resulting from noncompliance.

DAudit documentation should contain a caveat that all instances of material errors and fraud may not be identified.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. Per Government Auditing Standards, audit documentation should contain sufficient information so that supplementary oral Explanation: s are not required.

Choice 'a' is incorrect. The auditor should obtain written representation from management acknowledging responsibility for 'violations or possible violations of laws or regulations whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency.'

Choice 'c' is incorrect. The auditor should document procedures performed to evaluate compliance with laws and regulations that have a direct and material effect on the determination of financial statement amounts.

Choice 'd' is incorrect. There is no such requirement that audit documentation contain this caveat.

by Lavonda at May 06, 2022, 12:16 AM

Limited Time Offer

25%

5 months ago

I'm confident that B is the correct answer. The BA is validating the requirements by cross-checking the information from multiple sources to ensure the requirements accurately reflect the current business needs.

upvoted 0 times

...