ExpertMedium1 markMultiple Choice
CPA · Question 47 · Area IV: Forming Conclusions and Reporting
An auditor is performing a review of a nonissuer's interim financial information. The entity is also subject to an annual audit. Which of the following procedures is REQUIRED for the interim review?
An auditor is performing a review of a nonissuer's interim financial information. The entity is also subject to an annual audit. Which of the following procedures is REQUIRED for the interim review?
Answer options:
A.
Confirmation of material accounts receivable.
B.
Observation of inventory counts.
C.
Inquiry of management regarding significant changes in internal control.
D.
Testing the operating effectiveness of internal controls.
How to approach this question
Interim Review (AU-C 930) = Inquiry + Analytics. Similar to SSARS Review but in an audit context. Must ask about IC changes.
Full Answer
C.Inquiry of management regarding significant changes in internal control.✓ Correct
Inquiry of management regarding significant changes in internal control.
For a review of interim financial information (AU-C 930), the auditor performs inquiries and analytical procedures. A specific required inquiry involves asking management about significant changes in internal control since the most recent audit.
Common mistakes
Confusing interim review with interim audit testing.
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