SOFE Exam SOFA-CFE Topic 6 Question 84 Discussion

Actual exam question for SOFE's Certified Financial Examiner exam

Question #: 84
Topic #: 6

[All Certified Financial Examiner Questions]

Which type of misstatements are considered relevant fro audit purpose?

AMisstatements arising from fraudulent financial reporting

BMisstatements arising from misappropriation of assets

CBoth A and B

DNeither A nor B

Show Suggested Answer

Suggested Answer: C

by Alex at Apr 12, 2024, 11:29 AM

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Mitsue

14 hours ago

Exactly! The auditor's main focus is on identifying any intentional or fraudulent misstatements, as those pose a much greater risk to the financial statements. Unintentional errors are still important, but they're not the primary concern.

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Katina

2 days ago

That's a fair point, Layla. But I think the key distinction here is that the question is specifically about misstatements that are 'considered relevant for audit purposes.' Honest mistakes, while important, are often easier to identify and correct.

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Layla

3 days ago

Hmm, I'm not so sure. What about misstatements that arise from honest mistakes or oversights? Shouldn't those be considered relevant as well?

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Alecia

5 days ago

I agree with Cristy. These two types of misstatements are the core focus of an audit, as they can significantly impact the financial statements. Ignoring either of these would be a major oversight.

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Cristy

7 days ago

This is a great question! Clearly, the examiner is trying to test our understanding of the types of misstatements that are relevant for audit purposes. I think the answer is C - both misstatements from fraudulent financial reporting and misappropriation of assets are relevant.

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