ACCA Advanced Audit and Assurance (AAA) Practice Exam

Who is a user auditor?

1. An auditor who reviews service organizations

2. An auditor who audits user entity financial statements

3. An auditor responsible for tax audits

4. An internal auditor of a service organization

The correct answer is: An auditor who audits user entity financial statements

A user auditor is an auditor who focuses on auditing the financial statements of user entities, which are organizations that use the services of other entities, such as service organizations. This type of auditor assesses the financial statements to ensure they are presented fairly and in accordance with the applicable financial reporting framework. Their work often includes evaluating whether the internal controls of the service organization are effective enough to ensure that the financial statements are not materially misstated. This role is essential in providing assurance to stakeholders that the financial information of the user entity is reliable, especially when the user entity relies on external service providers for critical operations or reporting. In contrast, other options reflect different auditor roles. For instance, auditors who review service organizations focus on evaluating the systems and controls of those service providers rather than directly auditing the user entity's financial statements. Tax auditors have a distinct function related to compliance with tax regulations, and internal auditors typically work within the organization's own structure, focusing on internal processes and controls rather than external user audits. Thus, the unique responsibility of the user auditor is to ensure the integrity of the user entity's financial reporting.