Internal Control and Risk Assessment Practice Question

Question

A practitioner wants to reduce risk before proceeding for the CPA AUD Auditing and Attestation involving inventory observation in Internal Control and Risk Assessment. What should the candidate understand? (Item 92)

Answer choices

1. A. Ignore the issue because speed is more important than documentation or accuracy.
2. B. Assume the requirement applies only when the customer specifically asks about it.
3. C. Prioritize convenience over safety, compliance, or accurate reasoning.
4. D. The best answer is to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting for the inventory observation scenario.

Correct Answer

D. The best answer is to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting for the inventory observation scenario.

Explanation

The correct answer is D because inventory observation 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: hard
• Domain: Internal Control and Risk Assessment
• Objective: inventory observation

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