AICPA Exam CPA-Auditing Topic 3 Question 73 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 73
Topic #: 3

Which of the following is not a required procedure in an engagement to review the interim financial information of a publicly held entity?

AObtaining corroborating evidence about the entity's ability to continue as a going concern.

BComparing disaggregated revenue data for the current interim period with that of comparable prior periods.

CObtaining evidence that the interim financial information reconciles with the accounting records.

DInquiring of management about their knowledge of fraud or suspected fraud.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. A report on internal control related matters noted in an audit should not state that there are no significant deficiencies in internal control, since this statement might erroneously imply that the auditor searched for such conditions.

Choice 'a' is incorrect. The auditor is permitted to state that no material weaknesses were identified during the audit. Typically this occurs in reports submitted to governmental authorities.

Choice 'c' is incorrect. The auditor may suggest that corrective follow-up action should be taken due to the relative significance of material weakness discovered.

Choice 'd' is incorrect. The auditor's report may state that his or her consideration of internal control would not necessarily disclose all significant deficiencies that exist.

by Helaine at Aug 06, 2023, 11:57 PM

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Tawanna

10 days ago

Ah, I see. So they just want us to make sure the numbers add up, but don't really care about the underlying financial health of the company. Interesting approach.

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Hubert

14 days ago

Hmm, I'm not sure about this one. Shouldn't we be checking for fraud and other financial shenanigans? I'd rather play it safe and go with option D.

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Karon

16 days ago

Really? I would have thought that was an important step. Oh well, I guess the reviewers don't care if the company is about to go under as long as the numbers look good on paper.

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Francesco

16 days ago

I think option A is the correct answer. Obtaining evidence about the entity's ability to continue as a going concern is not a required procedure in an interim review engagement.

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