Exam AUD topic 1 question 955 discussion

Actual exam question from AICPA's AUD

Question #: 955
Topic #: 1

Which of the following is a documentation requirement that an auditor should follow when auditing in accordance with Government Auditing Standards?

A. The auditor should obtain written representations from management acknowledging responsibility for correcting instances of fraud, abuse, and waste.
B. Audit documentation should contain sufficient information so that supplementary oral Explanations are not required.
C. The auditor should document the procedures that assure discovery of all illegal acts and contingent liabilities resulting from noncompliance.
D. Audit documentation should contain a caveat that all instances of material errors and fraud may not be identified.

Show Suggested Answer

Suggested Answer: B 🗳️
Choice "B" is correct. Per Government Auditing Standards, audit documentation should contain sufficient information so that supplementary oral Explanations are not required.
Choice "A" is incorrect. The auditor should obtain written representation from management acknowledging responsibility for "violations or possible violations of laws or regulations whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency."
Choice "C" is incorrect. The auditor should document procedures performed to evaluate compliance with laws and regulations that have a direct and material effect on the determination of financial statement amounts.
Choice "D" is incorrect. There is no such requirement that audit documentation contain this caveat.

by gemazyni at April 5, 2025, 5:21 p.m.

Comments

Submit Cancel

Currently there are no comments in this discussion, be the first to comment!