AICPA Exam CPA-Auditing Topic 2 Question 47 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 47
Topic #: 2

An audit performed in accordance with OMB Circular A-133 will expand the auditor's responsibilities beyond generally accepted auditing standards. The auditor's expanded responsibilities include:

APerformance of additional procedures to test and report on compliance with laws, rules, regulations and provisions of contracts or grant agreements that have any effect on federal award programs.

BPerformance of additional procedures to test for noncompliance with laws, rules and regulations targeted for review by the Office of the Inspector General.

CPerformance of additional procedures to test and report on compliance with laws, rules, regulations and provisions of contracts or grant agreements that have a direct and material effect on major federal award programs.

DPerformance of additional procedures to test and report on achievement of program objectives.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct. OMB Circular A-133 expands the auditor's responsibilities to include procedures designed to test and report on compliance matters having a direct and material effect on major federal award programs.

Choice 'a' is incorrect. OMB Circular A-133 expands procedures to major programs as defined by the Circular, not to all programs.

Choice 'b' is incorrect. OMB Circular A-133 audit objectives relate to management's assertions regarding compliance with laws, rules, and regulations, not to noncompliance issues identified by the Office of the Inspector General.

Choice 'd' is incorrect. OMB Circular A-133 relates to the financial and compliance audits of major federal financial assistance programs, not to the achievement of program objectives.

by Edna at May 07, 2022, 02:39 PM

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