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

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What conclusion should the auditor reach if the company fails to present required quarterly financial data?

  1. Note that the company has not presented the data.

  2. State that the data are under review.

  3. Assume the data are accurate without further review.

  4. Include the absence of data in a management letter.

The correct answer is: Note that the company has not presented the data.

When a company fails to present required quarterly financial data, the appropriate conclusion for the auditor to reach is to formally note the lack of presentation of the data. This choice emphasizes the auditor's responsibility to acknowledge and document any significant omissions or irregularities in the financial reporting process. Selecting this option reflects the auditor's duty to maintain transparency and ensure that stakeholders are aware of the company's compliance with reporting standards. By noting the absence of the necessary data, the auditor highlights a potential gap in the company's financial oversight, which could impact users' understanding of the company's financial position and performance. In contrast, stating that the data are under review does not accurately communicate the failure to present the information, as it could imply that the data is forthcoming rather than absent. Assuming the data are accurate without further review contradicts the auditor's professional skepticism and due diligence duties, as it disregards any potential implications of the missing information. Including the absence of data in a management letter might address the issue but does not fulfill the immediate need for proper notation in the financial statements or reports provided to stakeholders. Thus, the choice to simply note the company's failure to present the data aligns with the auditor's responsibility for accountability and clear communication.