ExpertMedium1 markMultiple Choice
CPA · Question 47 · Area 4: Reporting
In a Group Audit, the group engagement partner decides not to make reference to the audit of a component auditor. What does this imply?
In a Group Audit, the group engagement partner decides not to make reference to the audit of a component auditor. What does this imply?
Answer options:
A.
The component auditor's work was not material.
B.
The group engagement partner assumes responsibility for the work of the component auditor.
C.
The component auditor issued a qualified opinion.
D.
The group engagement partner is sharing responsibility with the component auditor.
How to approach this question
No Reference = Full Responsibility. Reference = Shared Responsibility.
Full Answer
B.The group engagement partner assumes responsibility for the work of the component auditor.✓ Correct
The group engagement partner assumes responsibility for the work of the component auditor.
When the group engagement partner accepts responsibility for the work of a component auditor, no reference is made to the component auditor in the auditor's report. The group partner must supervise/review the component auditor's work.
Common mistakes
Thinking 'No Reference' means the component was ignored.
Practice the full CPA AUD Practice Exam
78 questions · hints · full answers · grading
More questions from this exam
Q01A CPA firm is auditing a large public company. The audit partner's spouse has just been promoted ...HardQ02During the acceptance phase of a new audit engagement for a private company, the successor audito...HardQ03A CPA firm is designing its system of quality control. Which of the following policies would most...MediumQ04An auditor is establishing an understanding with a client regarding the services to be performed ...MediumQ05Under the AICPA Code of Professional Conduct, which of the following fee arrangements is prohibit...Medium