ACCA Advanced Audit and Assurance (AAA) Practice Exam

Which of the following is true about user auditors?

1. They focus solely on internal controls of the user entity

2. They do not engage with service organizations

3. They provide audit opinions on financial statements of user entities

4. They typically work under the supervision of service auditors

The correct answer is: They provide audit opinions on financial statements of user entities

User auditors are auditors who examine the financial statements of a user entity that relies on services provided by a service organization. Their primary responsibility involves assessing whether the financial statements of the user entity fairly represent its financial position and performance. This often involves evaluating the impact of the services performed by the service organization on the user entity's financial statements. When user auditors conduct their audits, they consider the internal controls of the user entity; however, their focus is not solely on these controls. Rather, they assess how the services provided by service organizations affect the internal controls in the user entity. Additionally, while it is true that user auditors need to be aware of the services being performed by service organizations, it is incorrect to suggest that they do not engage with these organizations. In practice, user auditors often obtain reports and relevant information from service auditors, who focus on internal controls at service organizations. Though user auditors may work alongside service auditors and would reference their findings, they operate independently and are responsible for forming their own audit opinions on the financial statements of the user entity. Thus, the choice that states user auditors provide audit opinions on the financial statements of user entities accurately reflects the primary role of user auditors in the audit process.