AICPA Exam CPA-Auditing Topic 1 Question 87 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 87
Topic #: 1

Which of the following procedures should an auditor generally perform regarding subsequent events?

ACompare the latest available interim financial statements with the financial statements being audited.

BSend second requests to the client's customers who failed to respond to initial accounts receivable confirmation requests.

CCommunicate material weaknesses in the internal control structure to those charged with governance.

DReview the cut-off bank statements for several months after the year-end.

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 Barrie at May 10, 2024, 03:45 PM

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