Area 2: Risk Assessment — CPA Practice Question 25

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Recall the 3 mandatory procedures for Management Override (JE testing, Estimates, Unusual Transactions).

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B.Examine journal entries and other adjustments for evidence of possible material misstatement due to fraud.✓ Correct

Examine journal entries and other adjustments for evidence of possible material misstatement due to fraud.

To address the risk of management override of controls, the auditor must test the appropriateness of journal entries recorded in the general ledger and other adjustments made in the preparation of the financial statements.

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Selecting general substantive procedures instead of the specific JE testing requirement.

An auditor identifies a risk of material misstatement due to fraud related to management override of controls. Which of the following procedures is REQUIRED to address this specific risk?

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Practice the full CPA AUD Practice Exam

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