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    PracticeCPA®CPA AUD Practice Exam 5Question 42
    Hard1 markMultiple Choice
    Area III: ProceduresAUDProceduresInternal Control

    CPA · Question 42 · Area III: Procedures

    An auditor is testing the operating effectiveness of a control that leaves no documentary evidence (e.g., the controller's review of the budget vs. actual report). Which audit procedure is MOST appropriate?

    Answer options:

    A.

    Reperformance.

    B.

    Inspection of documents.

    C.

    Inquiry and Observation.

    D.

    Confirmation.

    How to approach this question

    Match procedure to control type. No paper trail = Inquiry/Observation.

    Full Answer

    C.Inquiry and Observation.✓ Correct
    For controls that do not leave a documentary trail (like a mental review or a meeting), the auditor typically relies on Inquiry (asking the controller) and Observation (watching the review process happen) to obtain evidence of operating effectiveness.

    Common mistakes

    Selecting Inspection when the prompt says 'no documentary evidence'.
    Question 41All questionsQuestion 43

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