Exam CPA Auditing and Attestation topic 1 question 34 discussion

Actual exam question from Test Prep's CPA Auditing and Attestation

Question #: 34
Topic #: 1

[All CPA Auditing and Attestation Questions]

When an independent CPA assists in preparing the financial statements of a publicly held entity, but has not audited or reviewed them, the CPA should issue a disclaimer of opinion. In such situations, the CPA has no responsibility to apply any procedures beyond:

A. Documenting that internal control is not being relied on.
B. Reading the financial statements for obvious material misstatements.
C. Ascertaining whether the financial statements are in conformity with GAAP.
D. Determining whether management has elected to omit substantially all required disclosures.

Show Suggested Answer

Suggested Answer: B 🗳️
Choice "b" is correct. The accountant is only required to read the financial statements for obvious material misstatements.
Choice "a" is incorrect. The accountant need not document that internal control is not being relied on.
Choices "c" and "d" are incorrect. The accountant is not required to evaluate conformity with GAAP, but any known departures (including inadequate disclosure) should be described in the disclaimer.

by gemazyni at April 5, 2025, 5:39 p.m.

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