Reporting and Attestation Practice Question

Question

A learner is comparing two similar concepts for the CPA AUD Auditing and Attestation involving materiality in Reporting and Attestation. Which option best reduces risk or error? (Item 103)

Answer choices

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

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 materiality scenario.

Explanation

The correct answer is C because materiality 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: Reporting and Attestation
• Objective: materiality

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