Internal Control and Risk Assessment Practice Question

Question

A practitioner wants to reduce risk before proceeding for the CPA AUD Auditing and Attestation involving subsequent events in Internal Control and Risk Assessment. Which answer is best? (Item 54)

Answer choices

  1. A. Choose an answer that removes accountability from the responsible professional.
  2. B. The best answer is to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting for the subsequent events scenario.
  3. C. Escalate only after taking irreversible action without reviewing the facts.
  4. D. Treat all similar terms as interchangeable without checking the scenario context.

Correct Answer

B. The best answer is to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting for the subsequent events scenario.

Explanation

The correct answer is B because subsequent events 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: subsequent events

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