ExpertHard1 markMultiple Choice
CPA · Question 62 · Area IV: Reporting
An auditor is performing a 'Single Audit'. The auditor identifies $20,000 of questioned costs in a major program. The total expenditures for that program are $5,000,000. The threshold for reporting questioned costs is $25,000. What is the auditor's reporting responsibility?
An auditor is performing a 'Single Audit'. The auditor identifies $20,000 of questioned costs in a major program. The total expenditures for that program are $5,000,000. The threshold for reporting questioned costs is $25,000. What is the auditor's reporting responsibility?
Answer options:
A.
The auditor must report the questioned costs because they exceed $10,000.
B.
The auditor is not required to report the questioned costs in the Schedule of Findings and Questioned Costs.
C.
The auditor must extrapolate the error to the population and report the projected error.
D.
The auditor must report it because any noncompliance is reportable.
How to approach this question
Memorize the Single Audit Questioned Cost Threshold: $25,000.
Full Answer
B.The auditor is not required to report the questioned costs in the Schedule of Findings and Questioned Costs.✓ Correct
Under the Uniform Guidance, the auditor must report known questioned costs greater than $25,000.
Common mistakes
Using old thresholds ($10k) or assuming zero tolerance.
Practice the full CPA AUD Practice Exam 4
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