Discuss AICPA CPA-Auditing Exam Topic 3 Question 17

Which of the following statements is correct concerning an auditor's required communication with those charged with governance?

AThis communication should include disagreements with management about significant audit adjustments, whether or not satisfactorily resolved.

BIf matters are communicated in writing, the report is appropriate for general use.

CIf matters are communicated in writing, the report is required to be distributed to both those charged with governance and management.

DThis communication is required to occur before the auditor's report on the financial statements is issued.

Suggested Answer: A

Choice 'a' is correct. An auditor is required to communicate certain matters to those charged with governance, including disagreements with management about significant audit adjustments, whether or not satisfactorily resolved.

Choice 'b' is incorrect. Written communications should include a limitation on the use of the communication.

Choice 'c' is incorrect. The auditor is not required to distribute the report to management, especially since certain matters might be inappropriate for discussion with management.

Choice 'd' is incorrect. The auditor is not required to make the communication before the auditor's report on the financial statements is finalized, as long as the communication occurs on a timely basis. (Note, however, that for audits of issuers, the communication must be made before the auditor's report is filled with the SEC.)

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10 comments · newest first

Dulce 11 months ago

Totally agree with A, transparency is key in audits!

Louann 12 months ago

B seems off, not all written reports are for general use.

Dong 12 months ago

Wait, is it really required to share the report with both parties? Sounds odd.

Aleta 12 months ago

I think D is the right choice, communication before the report makes sense.

Lashandra 1 year ago

A is definitely correct, disagreements should be noted.

Hershel 1 year ago

I'm a bit confused on the differences between the choices. Might need to review the details of each solution before deciding.

Valentin 1 year ago

Hmm, I'm not entirely sure about this one. I'll need to think it through carefully and review the material on site survey preparation.

Fausto 1 year ago

This seems pretty simple. I'll just go with Option A and sort the results by price descending.

Laurel 1 year ago

The key here is to focus on the specific statements about VPWS and determine which one is false. Gotta read the options closely.

Lashawnda 1 year ago

Ah, this is a good one. The key here is to use the Kube-Bench tool to identify and fix all the issues. I've used Kube-Bench before, so I'm confident I can get this done efficiently.

AICPA CPA-Auditing Exam - Topic 3 Question 17 Discussion