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

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Which of the following is not a requirement when auditing a single financial statement?

  1. The auditor should determine materiality for the complete set of financial statements.

  2. The auditor should perform procedures on interrelated items.

  3. The audit may be performed as a separate engagement or with a complete set of financial statements.

  4. The auditor should understand the intended users of the statement.

The correct answer is: The auditor should determine materiality for the complete set of financial statements.

Determining materiality for the complete set of financial statements is not a requirement when auditing a single financial statement. In such an audit, the focus is specifically on the individual statement, which requires the auditor to establish materiality based solely on the relevant figures presented in that particular statement. This involves assessing the significance of misstatements or omissions in the context of only that financial statement, rather than in relation to an entire set of financial statements. Materiality in the context of a full set of financial statements can differ significantly from materiality in an isolated financial statement due to the different level of detail and potential implications. Therefore, the requirements for auditing a single financial statement are tailored to that statement's specific context and needs, emphasizing the relevance of materiality as it relates solely to it. The other choices reflect necessary considerations and requirements for an audit of a single financial statement. Performing procedures on interrelated items is essential, as many financial statements include components that are interconnected, and incomplete review might miss important relationships. Understanding the intended users is also crucial, as it helps the auditor focus on the specific needs and expectations of those who will rely on the statement. Lastly, the statement that the audit may be performed as a separate engagement or in conjunction with a full set

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