AICPA CPA-Auditing Exam - Topic 2 Question 68 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 68
Topic #: 2

An accountant has been asked to issue a review report on the balance sheet of a nonissuer but not to report on the other basic financial statements. The accountant may not do so:

ABecause compliance with this request would result in a violation of the ethical standards of the profession.

BBecause compliance with this request would result in an incomplete review.

CIf the review of the balance sheet discloses material departures from GAAP.

DIf the scope of the inquiry and analytical procedures has been restricted.

Show Suggested Answer

Suggested Answer: A

Choice 'a' is correct. An auditor should obtain management's written assertion about the effectiveness of the entity's internal control.

Choice 'b' is incorrect. The accountant should disclaim (not qualify) an opinion on management's assertions that the cost of correcting weaknesses exceeds the benefits.

Choice 'c' is incorrect. The accountant has no responsibility to evaluate the effect of subsequent events. In fact, the report on an entity's internal control specifically states that projections of the internal control evaluation to future periods is inappropriate.

Choice 'd' is incorrect. The accountant does provide an opinion (and not a disclaimer) on the effective operation of internal control.

by Bernardine at Apr 03, 2023, 03:56 PM

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Jaclyn

4 months ago

D makes sense too, scope matters a lot!

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Dorothy

4 months ago

C could also be a factor if GAAP issues pop up.

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Shannan

4 months ago

Wait, are we sure about that? Seems odd to skip other statements.

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Janessa

4 months ago

Totally agree, can't just look at one part!

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Rodolfo

4 months ago

B is the right answer! Incomplete review for sure.

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Stevie

5 months ago

I feel like option A is too strict; I don't recall ethical standards preventing a review of just one statement.

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Alana

5 months ago

I think I saw a practice question similar to this, and it emphasized the importance of GAAP compliance, which might relate to option C.

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Tien

5 months ago

I'm not entirely sure, but I feel like option D could be relevant if the accountant's work is limited.

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Zachary

5 months ago

I remember discussing how a review report should cover all financial statements, so I think option B makes sense.

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Ollie

5 months ago

I feel pretty confident about this one. Provider Search and Intelligent Appointment Management are the two capabilities that will best meet the requirements described in the question. The other options don't seem as directly relevant to the specific needs of the call center agent.

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Anika

5 months ago

Whew, this is a lot to consider. I'll need to really focus on understanding the relationship between the different systems and how they need to work together. Enabling SSO is a must, but I'm not sure about the other steps.

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