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Exam AUD topic 1 question 75 discussion

Actual exam question from AICPA's AUD
Question #: 75
Topic #: 1
[All AUD Questions]

Which of the following is true regarding the standard audit report for an issuer?

  • A. Reference should be made in the scope paragraph to both PCAOB standards and generally accepted auditing standards.
  • B. PCAOB standards should not be mentioned at all, although their use is implied in the standard auditor's report.
  • C. Reference should be made in the scope paragraph to PCAOB standards, and in the opinion paragraph to generally accepted accounting principles.
  • D. Reference may be made in the scope paragraph to either PCAOB standards or generally accepted auditing standards.
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Suggested Answer: C 🗳️
Choice "C" is correct. An auditor reporting on the audit of financial statements of an issuer should indicate in the scope paragraph that the engagement was conducted in accordance with PCAOB standards, and should refer to GAAP in the opinion paragraph.
Choice "A" is incorrect. An auditor reporting on the audit of financial statements of a nonissuer may (but is not required to) refer to both PCAOB standards and generally accepted auditing standards in the scope paragraph. Audit reports for audits of issuers refer only to PCAOB standards in the scope paragraph.
Choice "B" is incorrect. An auditor reporting on the audit of financial statements of an issuer should indicate in the scope paragraph that the engagement was conducted in accordance with PCAOB standards. This is an explicit statement in the report; it is not implied or assumed.
Choice "D" is incorrect. An auditor reporting on the audit of financial statements of an issuer should indicate in the scope paragraph that the engagement was conducted in accordance with PCAOB standards. Referring to generally accepted auditing standards instead is not an option, as audits of issuers must follow
PCAOB standards.
by gemazyni at April 5, 2025, 4:08 p.m.

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