CCA Audit Methodology and Procedures 5

Question 1

A contractor submits a claim for extended general conditions costs due to an owner-caused delay. Which document is most critical for the auditor to review first?

Accepted Answer

The project schedule showing the critical path and delay impact

Answer

The critical path analysis in the project schedule is essential to confirm that the owner-caused delay actually extended project duration and generated additional general conditions costs.

Question 2

Which of the following best describes 'substantive testing' in construction audit methodology?

Accepted Answer

Directly testing transactions and balances to obtain audit evidence about financial statement assertions

Answer

Substantive testing involves directly examining transactions, invoices, and account balances to verify that amounts are accurate and properly supported.

Question 3

When auditing a construction project's stored materials billing, the auditor should verify that:

Accepted Answer

Materials are properly insured, titled to the owner or project, and protected from damage or theft

Answer

For stored materials to be properly billed, they must be adequately insured, the owner must have a clear title interest, and the materials must be securely stored.

Question 4

An auditor reviewing a guaranteed maximum price (GMP) contract discovers the contractor's actual costs came in significantly below the GMP. The auditor should verify:

Accepted Answer

How savings are shared between the owner and contractor per the contract's savings-sharing provision

Answer

GMP contracts typically include a savings-sharing clause defining how cost savings below the GMP are split between owner and contractor, which the auditor must verify was applied correctly.

Question 5

The primary purpose of an entrance conference at the start of a construction audit is to:

Accepted Answer

Establish audit scope, objectives, timeline, and document request procedures with the auditee

Answer

The entrance conference sets expectations, communicates audit scope and objectives, and establishes how the audit will be conducted and documents will be requested.

(CCA) Certified Construction Auditor Practice Test

(CCA) Certified Construction Auditor Practice Test

CCA Audit Methodology and Procedures 5