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AICPA CPA-Auditing Exam - Topic 3 Question 91 Discussion

In assessing control risk, an auditor ordinarily selects from a variety of techniques, including:
A) Inquiry and analytical procedures.
B) Reperformance and observation.
C) Comparison and confirmation.
D) Inspection 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.

AICPA CPA-Auditing Exam - Topic 3 Question 91 Discussion

Actual exam question for AICPA's CPA-Auditing exam
Question #: 91
Topic #: 3
[All CPA-Auditing Questions]

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

Show Suggested Answer Hide 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

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Elbert
7 months ago
Tests of controls include inquiry and inspection.
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Olive
8 months ago
Reperformance and observation are key for sure!
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Yong
8 months ago
Wait, confirmation isn't a test of controls? That’s surprising!
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Val
8 months ago
I thought A was useful too, but I guess not.
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Anastacia
8 months ago
B is definitely the right choice!
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Rory
9 months ago
I thought inspection and verification were more about substantive testing, so I'm leaning towards choice B for this question.
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Lorriane
9 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.
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Lashaun
9 months ago
I think I saw a similar question where reperformance was highlighted as a critical technique. It makes sense for control risk, right?
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Sonia
9 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.
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Lenita
9 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.
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Paola
9 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.
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Leandro
9 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.
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Marsha
9 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.
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Kallie
9 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.
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Alva
9 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.
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Dusti
9 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.
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Tamra
10 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.
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Peter
1 year 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?
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Jovita
1 year 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.
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Brittni
1 year ago
I guess auditors take control risk assessment pretty seriously, they have specific techniques for that.
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Andra
1 year ago
Yeah, analytical procedures are more for substantive testing, not control risk assessment.
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Andra
1 year ago
Auditors use analytical procedures for planning the audit, not for assessing control risk.
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Jacquelyne
1 year ago
Ah, I see. Reperformance and observation make sense for assessing control risk. I'll have to remember that one.
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Stevie
1 year ago
Comparison and confirmation are not typically used for assessing control risk.
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Dion
1 year ago
Inquiry and analytical procedures are also important in the process.
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Ivette
1 year ago
Yes, reperformance and observation are key techniques for assessing control risk.
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Shay
1 year ago
Hmm, I'm a bit confused. Aren't comparison and confirmation part of substantive testing, not control testing?
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Clorinda
1 year ago
Oh, I see. Thanks for clarifying. I'll remember that for the exam.
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Carissa
1 year ago
Actually, the correct answer is B) Reperformance and observation. Those are the techniques used in assessing control risk.
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Kimberlie
1 year ago
Reperformance and observation? That's a new one for me. I always thought it was just inquiry and inspection.
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Sabine
1 year ago
Yes, such as inquiry, inspection, reperformance, and observation.
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Junita
1 year ago
So, tests of controls can include a variety of procedures.
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Nina
1 year ago
Reperformance and observation are also commonly used techniques.
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Carey
1 year ago
I always thought it was just inquiry and inspection.
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Clorinda
1 year ago
I think the answer is A) Inquiry and analytical procedures.
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