AICPA CPA-Auditing Exam - Topic 3 Question 91 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 91
Topic #: 3

In assessing control risk, an auditor ordinarily selects from a variety of techniques, including:

AInquiry and analytical procedures.

BReperformance and observation.

CComparison and confirmation.

DInspection and verification.
Explanation
Choice 'b' is correct. Tests of controls used in assessing control risk ordinarily include procedures such as inquiry of appropriate entity personnel, inspection of documents and reports indicating performance of the policy or procedure, observation of the application of the policy or procedure, and reperformance of the application of the policy or procedure by the auditor.
Choice 'a' is incorrect. Analytical procedures are used in planning the audit, as a form of substantive testing, and as a final review. They are not useful in assessing control risk.
Choice 'c' is incorrect. Confirmation is a form of substantive testing, not a test of controls for assessing control risk.
Choice 'd' is incorrect. Verification is a form of substantive testing, not a test of controls for assessing control risk.

Show Suggested Answer

Suggested Answer: A

Choice 'a' is correct. An auditor's communication of internal control related matters noted in an audit usually should be addressed to management and those charged with governance.

Choices 'b', 'c', and 'd' are incorrect. The director of internal auditing, the chief financial officer, and the chief accounting officer all would have access to the letter; however, it would not be addressed to them since they do not have the same level of authority and responsibility to the shareholders as management and those charged with governance.

by Leatha at Jul 05, 2024, 04:30 AM

Limited Time Offer

25%

Off

Get Premium CPA-Auditing Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Elbert

3 months ago

Tests of controls include inquiry and inspection.

upvoted 0 times

...

Olive

3 months ago

Reperformance and observation are key for sure!

upvoted 0 times

...

Yong

3 months ago

Wait, confirmation isn't a test of controls? That’s surprising!

upvoted 0 times

...

Val

4 months ago

I thought A was useful too, but I guess not.

upvoted 0 times

...

Anastacia

4 months ago

B is definitely the right choice!

upvoted 0 times

...

Rory

4 months ago

I thought inspection and verification were more about substantive testing, so I'm leaning towards choice B for this question.

upvoted 0 times

...

Lorriane

4 months ago

I feel like analytical procedures were mentioned in our study guide, but I can't recall if they apply to control risk or just planning.

upvoted 0 times

...

Lashaun

4 months ago

I think I saw a similar question where reperformance was highlighted as a critical technique. It makes sense for control risk, right?

upvoted 0 times

...

Sonia

5 months ago

I remember we discussed that inquiry and observation are key techniques, but I'm not sure if they fall under control risk assessment specifically.

upvoted 0 times

...

Lenita

5 months ago

I'm a bit unsure on this one. The question is asking about control risk assessment techniques, but some of these options seem more like substantive testing procedures. I'll need to double-check my understanding of the differences.

upvoted 0 times

...

Paola

5 months ago

Okay, let's see here. I know analytical procedures are used for planning and substantive testing, not control risk assessment. And confirmation is a substantive test, not a control test. I think the answer is B - reperformance and observation.

upvoted 0 times

...

Leandro

5 months ago

Hmm, this is a tricky one. I'll need to carefully review the options and think through the differences between the various control risk assessment techniques.

upvoted 0 times

...

Marsha

5 months ago

I'm pretty confident I can handle this one. The key is to focus on the techniques used to assess control risk, like inquiry, observation, and reperformance.

upvoted 0 times

...

Kallie

5 months ago

This is a straightforward question if you know the key control risk assessment techniques. Inquiry, observation, and reperformance are the go-to methods, so the answer is clearly B.

upvoted 0 times

...

Alva

5 months ago

Ah, I see the problem now! The code in both segments will cause an infinite loop. I'm confident I can explain why if I'm asked to.

upvoted 0 times

...

Dusti

5 months ago

This seems like a pretty straightforward question about the prerequisites for using vRealize Log Insight Cloud. I'm going to carefully read through the options and think about which one makes the most sense.

upvoted 0 times

...

Tamra

5 months ago

Hmm, I'm a bit unsure about this one. The data volume is massive at 40 TB, so I'm wondering if BigQuery is really the best fit. Cloud Bigtable might be a better option for handling that kind of scale.

upvoted 0 times

...

Peter

9 months ago

Inspection and verification? That sounds like something out of a spy movie, not an audit. What, are they going to use invisible ink and secret handshakes too?

upvoted 0 times

...

Jovita

9 months ago

Wait, so analytical procedures are useless for control risk assessment? That's a bold statement. I wonder if the auditors have a good sense of humor about that.

upvoted 0 times