CPA Auditing and Attestation Practice Exam 2026 – Complete Prep Guide

When a PCAOB auditing standard states that an auditor "could" perform a specific procedure, it implies that the procedure is not mandatory but rather a recommendation based on the auditor's assessment of the particular circumstances surrounding the audit. The correct approach for the auditor in this situation is to exercise professional judgment. This means the auditor must consider various factors, including the specific circumstances of the audit, the risks involved, the nature of the entity being audited, and any relevant information that may influence the decision.

Professional judgment allows auditors to tailor their procedures to the unique aspects of each audit engagement, ensuring that they are effectively addressing identified risks and concerns without unnecessary duplication of efforts. Elements such as materiality, risk assessment, and the entity's internal control environment also play a crucial role in determining whether or not to implement suggested procedures. An auditor’s ability to make informed decisions based on professional judgment is a critical skill that ensures the audit is effective and efficient.

While input from an audit committee, evaluating inspection risks, or comparing PCAOB standards with AICPA standards are all important aspects of an audit process, they may not directly influence the decision to implement a specific procedure where the standard allows for auditor discretion. Ultimately, the key determinant is how the auditor's professional judgment is