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

What information is least likely to be included in the audit report regarding a critical audit matter?

1. Reference to relevant financial statement accounts.

2. Description of how the matter was addressed in the audit.

3. Description of principal considerations leading to a critical audit matter.

4. A statement disclaiming responsibility for critical audit matters.

The correct answer is: A statement disclaiming responsibility for critical audit matters.

In an audit report, the discussion surrounding critical audit matters (CAMs) is intended to enhance transparency and provide users with insight into areas that required significant auditor attention. A critical audit matter typically involves matters arising from the audit that were communicated to the audit committee and that relate to accounts or disclosures that are material to the financial statements. The inclusion of information such as a reference to relevant financial statement accounts helps users understand the context of the critical audit matter within the accounting framework. Describing how the matter was addressed in the audit informs readers about the auditor's procedures and responses to the issue, which underlines the diligence exercised during the audit process. Additionally, outlining the principal considerations that led to identifying a matter as critical provides clarity on the judgment and reasoning behind the auditor's focus on that particular issue. In contrast, a statement that disclaims responsibility for critical audit matters would not align with the purpose of such disclosures. CAMs are intended to communicate areas where the auditor has exercised significant judgment rather than to divert responsibility from the auditor regarding those matters. Thus, including a disclaimer would contradict the informative nature of the audit report and diminish the transparency it aims to provide.