AICPA Exam CPA-Auditing Topic 1 Question 92 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 92
Topic #: 1

Which of the following statements concerning an auditor's communication of significant deficiencies identified during the audit of a nonissuer is correct?

AThe auditor should request a meeting with management one level above the source of the significant deficiencies to discuss suggestions for remedial action.

BAny report issued on significant deficiencies should indicate that providing assurance on internal control was not the purpose of the audit.

CSignificant deficiencies discovered and communicated at an interim date should be reexamined with tests of controls before completing the engagement.

DSuggestions concerning administration efficiencies and business strategies should not be communicated in the same report with significant deficiencies.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. Any report issued on significant deficiencies should indicate that providing assurance on internal control was not the purpose of the audit.

Choice 'a' is incorrect. The auditor should communicate significant deficiencies to management and those charged with governance, but is not required to request a meeting with management one level above the source of the reportable conditions, to discuss suggestions for remedial action.

Choice 'c' is incorrect. Significant deficiencies discovered and communicated at an interim date do not need to be reexamined with tests of controls before completing the engagement.

Choice 'd' is incorrect. Suggestions concerning administration efficiencies and business strategies may be communicated in the same report with significant deficiencies (the significant deficiencies must be separately identified, however).

by Wenona at Jul 11, 2024, 04:37 PM

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Dominga

4 months ago

Ooh, this is a tricky one. I'm going to have to go with C, just to be safe. Can't be too careful with those significant deficiencies, you know?

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King

4 months ago

Definitely, it's crucial to take the necessary steps to ensure accuracy and reliability in the audit process.

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Noah

4 months ago

I agree, it's better to be safe than sorry when it comes to addressing significant deficiencies.

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Brittni

4 months ago

I think C is a good choice. It's important to reexamine significant deficiencies with tests of controls.

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Sheron

4 months ago

I agree with Carmelina, A seems like the right choice for effective communication.

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Carmelina

4 months ago

But A makes sense because discussing suggestions for remedial action is important.

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Ciara

4 months ago

Haha, this question is a real head-scratcher. I'm just going to go with A and hope the auditor can work some magic with management!

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Carla

4 months ago

D is a bit strange. Why wouldn't the auditor communicate suggestions for business strategies along with significant deficiencies? Seems like valuable feedback.

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Annabelle

3 months ago

D) Suggestions concerning administration efficiencies and business strategies should not be communicated in the same report with significant deficiencies.

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Clare

3 months ago

C) Significant deficiencies discovered and communicated at an interim date should be reexamined with tests of controls before completing the engagement.

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Blair

3 months ago

B) Any report issued on significant deficiencies should indicate that providing assurance on internal control was not the purpose of the audit.

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Estrella

3 months ago

A) The auditor should request a meeting with management one level above the source of the significant deficiencies to discuss suggestions for remedial action.

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Craig

5 months ago

I disagree, I believe it's B.

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Carmelina

5 months ago

I think the correct statement is A.

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Denny

5 months ago

C seems like the right choice to me. The auditor should reexamine any significant deficiencies found at an interim date before completing the engagement.

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Sheridan

5 months ago

I think B is the correct answer. The auditor should make it clear that the audit's purpose was not to provide assurance on internal control.

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Sherly

4 months ago

D) Suggestions concerning administration efficiencies and business strategies should not be communicated in the same report with significant deficiencies.

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Shannon

4 months ago

C) Significant deficiencies discovered and communicated at an interim date should be reexamined with tests of controls before completing the engagement.

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Tamala

4 months ago

B) Any report issued on significant deficiencies should indicate that providing assurance on internal control was not the purpose of the audit.

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Dahlia

4 months ago

A) The auditor should request a meeting with management one level above the source of the significant deficiencies to discuss suggestions for remedial action.

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