AICPA Exam CPA-Auditing 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

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Clorinda

4 days ago

I think the answer is A) Inquiry and analytical procedures.

upvoted 0 times

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