AICPA CPA-Auditing Exam - 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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Lavonda

5 months ago

C is definitely required, no doubt about that!

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Delisa

5 months ago

I’m not sure about B either, feels like a stretch.

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Vinnie

5 months ago

Wait, isn't inquiring about fraud super important?

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Bernardo

5 months ago

Totally agree, A seems unnecessary for a review.

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Lorean

6 months ago

I think option A is not required.

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Louann

6 months ago

Inquiring about fraud seems important, but I wonder if it's strictly required for interim reviews. I need to double-check that one!

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Rex

6 months ago

I feel like obtaining evidence that the interim financial information reconciles with the accounting records is pretty standard, but I could be mixing it up with other procedures.

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Rolland

6 months ago

I remember practicing a question similar to this, and I think comparing revenue data is definitely part of the review process, so that might not be the right answer.

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Nina

6 months ago

I think option A might be required since going concern is a big deal, but I'm not entirely sure.

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Natalya

6 months ago

Hmm, I'm a bit unsure about this one. I know early adopters are important, but I'm not sure exactly how they are considered opinion leaders. I'll have to review my notes on the diffusion of innovations model.

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Edna

6 months ago

I'm a bit confused by this question. The different syntax for different technologies part is throwing me off. I'll need to re-read the question and the answer choices a few times to make sure I understand what's being asked.

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Rutha

6 months ago

I'm a bit uncertain about whether the default gateway setup should be routed or transparent. I might be overthinking it!

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Louisa

11 months ago

Wait, so we're not even supposed to check if the company might go bankrupt? That's like having a doctor do a checkup without checking your vital signs. Sounds like a recipe for disaster to me.

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Ilona

10 months ago

C) Obtaining evidence that the interim financial information reconciles with the accounting records.

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Jovita

10 months ago

B) Comparing disaggregated revenue data for the current interim period with that of comparable prior periods.

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Lakeesha

10 months ago

A) Obtaining corroborating evidence about the entity's ability to continue as a going concern.

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Tawanna

12 months 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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Jerry

11 months ago

User 2: Yeah, that's one of the required procedures in the engagement.

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Eleonora

11 months ago

User 1: I think we need to compare revenue data for the current period with past periods.

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Hubert

12 months 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

1 year 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

1 year 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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