CPA-AUD.pdf - CPP-Institute CPA-AUD CPA Auditing and Attestation http\/killexams.com\/exam-detail\/CPA-AUD QUESTION 369 An auditor's communication of

CPA-AUD.pdf - CPP-Institute CPA-AUD CPA Auditing and...

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CPA-AUD CPP-Institute CPA Auditing and Attestation
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QUESTION: 369 An auditor's communication of internal control related matters noted in an audit usually should be addressed to: A. Management and those charged with governance. B. The director of internal auditing. C. The chief financial officer. D. The chief accounting officer. Answer: A Explanation: Choice "a" is correct. An auditor's communication of internal control related matters noted in an audit usually should be addressed to management and those charged with governance. Choices "b", "c", and "d" are incorrect. The director of internal auditing, the chief financial officer, and the chief accounting officer all would have access to the letter; however, it would not be addressed to them since they do not have the same level of authority and responsibility to the shareholders as management and those charged with governance. QUESTION: 370 When reporting on conditions relating to an entity's internal control observed during an audit of the financial statements of a nonissuer, the auditor should include a: A. Description of tests performed to search for material weaknesses. B. Statement of positive assurance on internal control. C. Paragraph describing the inherent limitations of internal control. D. Restriction on the use of the report. Answer: D Explanation: Choice "d" is correct. When reporting on conditions relating to an entity's internal control observed during an audit of the financial statements, the auditor should include a restriction on the use of the report. Choice "a" is incorrect. The auditor would not include a description of tests performed to search for material weaknesses since the auditor is not in fact obligated to search for them. Choices "b" and "c" are incorrect. An auditor would make a statement of positive assurance on internal control and include a
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paragraph describing the inherent limitations of internal control in conjunction with an engagement to report on internal control. These comments would not be made when reporting on an entity's internal control in conjunction with an audit of the financial statements of a nonissuer. QUESTION: 371 An engagement to express an opinion on the internal control of a nonissuer will generally: A. Require procedures that duplicate those already applied in assessing control risk during a financial statement audit. B. Increase the reliability of the financial statements that have already been audited. C. Be more extensive in scope than the assessment of control risk made during a financial statement audit.
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