ExpertHard1 markMultiple Choice
CPA · Question 64 · Area 4: Reporting
Under PCAOB standards, which of the following is a requirement regarding 'Critical Audit Matters' (CAMs)?
Under PCAOB standards, which of the following is a requirement regarding 'Critical Audit Matters' (CAMs)?
Answer options:
A.
The auditor must issue a separate opinion on each CAM.
B.
CAMs are only required for adverse opinions.
C.
The auditor must describe the principal considerations that led the auditor to determine that the matter is a CAM.
D.
CAMs replace the need for an Emphasis-of-Matter paragraph.
How to approach this question
CAMs (Issuers only). Requirement: Identify, Describe Why, Describe How Addressed.
Full Answer
C.The auditor must describe the principal considerations that led the auditor to determine that the matter is a CAM.✓ Correct
The auditor must describe the principal considerations that led the auditor to determine that the matter is a CAM.
PCAOB AS 3101 requires the auditor to communicate Critical Audit Matters in the auditor's report. This includes describing the considerations that led to the determination and how the matter was addressed in the audit.
Common mistakes
Thinking CAMs require a separate opinion.
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