Audit and Assurance Practice Exam

In a PCAOB audit report that includes CAMs, which item would likely be excluded?

1. A description of all audit procedures performed.

2. A summary of significant unadjusted misstatements.

3. An overview of the audit approach taken.

4. Information related to the risks of material misstatement.

The correct answer is: A description of all audit procedures performed.

In a PCAOB audit report that includes Critical Audit Matters (CAMs), the item that would likely be excluded is a description of all audit procedures performed. The focus of CAMs is to highlight matters that were communicated to the audit committee and that have significance to the financial statements. The purpose is to provide insight into the audit process and the areas of significant judgment or risk, rather than to detail every step taken during the audit. While the audit report may provide a summary of significant unadjusted misstatements, an overview of the audit approach, and information about risks of material misstatement, these elements are more aligned with the reporting requirements of CAMs. Items that delve into exhaustive descriptions of all audit procedures performed would detract from the report’s primary purpose and may not offer additional value to the users of the financial statements. Thus, this specific item is excluded in favor of broader matters that communicate the critical aspects of the audit process and findings.