exam questions

Exam CPA Auditing and Attestation All Questions

View all questions & answers for the CPA Auditing and Attestation exam

Exam CPA Auditing and Attestation topic 1 question 21 discussion

Actual exam question from Test Prep's CPA Auditing and Attestation
Question #: 21
Topic #: 1
[All CPA Auditing and Attestation Questions]

Which of the following statements is a basic element of the auditor's standard report?

  • A. The disclosures provide reasonable assurance that the financial statements are free of material misstatement.
  • B. The auditor evaluated the overall internal control.
  • C. An audit includes assessing significant estimates made by management.
  • D. The financial statements are consistent with those of the prior period.
Show Suggested Answer Hide Answer
Suggested Answer: C 🗳️
Choice "c" is correct. The auditor's standard audit report includes a statement that "An audit includes assessing...significant estimates made by management..."
Choice "a" is incorrect. The standard audit report does not state that disclosures provide reasonable assurance that the financial statements are free of material misstatement. The correct statement is:
"...standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement."
Choice "b" is incorrect. The standard audit report does not state that the auditor evaluated the overall internal control. The correct statement is "An audit includes...evaluating the overall financial statement presentation." Internal control is not mentioned in the standard audit report.
Choice "d" is incorrect. The standard audit report does not state "The financial statements are consistent with those of the prior period." According to the second standard of reporting, consistency is implicitly reported. Only if there is an inconsistency is an explicit statement included.

Comments

Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.
Switch to a voting comment New
Currently there are no comments in this discussion, be the first to comment!
Community vote distribution
A (35%)
C (25%)
B (20%)
Other
Most Voted
A voting comment increases the vote count for the chosen answer by one.

Upvoting a comment with a selected answer will also increase the vote count towards that answer by one. So if you see a comment that you already agree with, you can upvote it instead of posting a new comment.

SaveCancel
Loading ...