Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

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Prepare for the CPA Auditing and Attestation Exam. Leverage comprehensive materials, flashcards, and detailed explanations for each question. Master essential auditing concepts and techniques with confidence!

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If Blue, CPA, issues a written report on a transaction involving another CPA’s audit, what should Blue do?

Notify the audit committee of the findings.
Disclaim that the application conforms with GAAP.
Consult with the continuing CPA for transaction details.
Inform the entity that the report is for general use.

The correct answer is: Consult with the continuing CPA for transaction details.

When Blue, CPA, issues a written report on a transaction involving another CPA's audit, it is essential for Blue to consult with the continuing CPA for transaction details. This practice is crucial because it ensures that Blue has a comprehensive understanding of the context surrounding the audit, including any significant assumptions, methodologies, or findings made by the original CPA. Proper consultation allows Blue to provide an informed and accurate assessment in the report, as well as to clarify any points that may be ambiguous or require additional explanation. Engaging with the original auditor is also a vital step in maintaining the integrity of the profession and ensuring that all relevant information is considered before issuing a report. This communication helps to prevent misinterpretation and supports adherence to the ethical standards expected in the field of accounting and auditing. Overall, consulting with the continuing CPA promotes accuracy, transparency, and professionalism in the reporting process.