Internal Control and Risk Assessment Practice Question

Question

A practitioner wants to reduce risk before proceeding for the CPA AUD Auditing and Attestation involving analytical procedures in Internal Control and Risk Assessment. Which response best applies the concept? (Item 111)

Answer choices

  1. A. Skip verification because the previous case had the same answer.
  2. B. Document nothing because documentation could create follow-up questions.
  3. C. The best answer is to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting for the analytical procedures scenario.
  4. D. Rely on informal custom instead of the applicable rule, control, or standard.

Correct Answer

C. The best answer is to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting for the analytical procedures scenario.

Explanation

The correct answer is C because analytical procedures is tested by asking candidates to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting. The distractors reflect common exam mistakes: ignoring context, using informal shortcuts, skipping verification, or applying a rule from the wrong domain.

Question details

  • Difficulty: medium
  • Domain: Internal Control and Risk Assessment
  • Objective: analytical procedures

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