CPEA practice question 3 of 15
During audit of the financial statements, the auditors are concerned with the verification and determination of which one of the following items?
Choose your answer, then check it against the explanation and the full breakdown below.
Question breakdown
Key idea: In a financial statement audit, auditors verify that recorded items carry the correct date, are accurate and are reliable.
How to reach the answer
- The stem asks what auditors verify and determine about recorded items.
- Verification concerns items that actually exist and are recorded, not judgments such as feasibility.
- Date relates to cutoff and the correct period, while accuracy and reliability support fair presentation.
- Only option B lists three attributes that can be verified, so B is the answer.
Each option
Common trap: Option C looks right because value and reliability are relevant, but policies are not verified as recorded items.
In practice: Cutoff testing and accuracy checks on environmental liabilities or remediation accruals rely on exactly these attributes.
Remember: Verification targets attributes that can be tested: correct date, accuracy and reliability.
Drafted with AI assistance and checked against the answer key.
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Other CPEA practice questions
- Question 1Which one of the following is FALSE about Internal Control Evaluation Checklists (ICEC)?
- Question 2The protection of the environment is the responsibility:
- Question 4An extrinsic audit would normally focus on which of the following?
- Question 5It is also significant that the U.S. EPA may require, as a condition for penalty mitigati…
- Question 6Environmental legislation is designed to:
- Question 7While considering internal control system of an entity, the auditor is basically concerne…
