AUD EXAM QUESTIONS AND ANSWERS
unmodified or qualified - Answers -when the auditor is engaged to report on the
supplementary information, either _______________(unmodified or
qualified/unmodified/adverse) opinion was expressed on the FSs
key audit matters - Answers -_________________(key audit matters/significant events)
are those matters, in the auditor's professional judgement, were of most significance in
the audit of the FSs of the CURRENT period; selected matters communicated with
those charged with governance
responsibilities - Answers -________________(responsibilities/ public interest/
integrity/ objectivity and independence/due care/scope and nature of services) is one of
the six professional conduct principles where the members should exercise sensitive
professional and moral judgements. They should cooperate to improve the art of
accounting, maintain the public's confidence, and carry out the profession's special
responsibilities for self governance
public interest - Answers -________________(responsibilities/ public interest/ integrity/
objectivity and independence/due care/scope and nature of services) is one of the six
professional conduct principles where members should accept the obligation to act in a
way that will serve the public interest, honor the public interest, and demonstrate a
commitment to professionalism; acceptance to its responsibility to the public
integrity - Answers -________________(responsibilities/ public interest/ integrity/
objectivity and independence/due care/scope and nature of services) is one of the six
professional conduct principles to maintain and broaden confidence, members should
perform all professional responsibilities with the highest sense of integrity; measured in
terms of right and just
objectivity and independence - Answers -________________(responsibilities/ public
interest/ integrity/ objectivity and independence/due care/scope and nature of services)
is one of the six professional conduct principles where a member should maintain
objectivity and be free of conflicts of interest in discharging professional responsibilities;
a member should be independent in fact and appearance when providing auditing and
other attestation services
due care - Answers -________________(responsibilities/ public interest/ integrity/
objectivity and independence/due care/scope and nature of services) is one of the six
professional conduct principles where a member should leave observe the profession's
technical and ethical standards, strive continually to improve competence and the
quality of services, and discharge professional responsibility to the best of the member's
ability
,scope and nature of services - Answers -________________(responsibilities/ public
interest/ integrity/ objectivity and independence/due care/scope and nature of services)
is one of the six professional conduct principles where a member in public practice
observes the Principles Code of Professional Conduct in determining the scope and
nature of services to be provided
restrictive - Answers -a member serving multiple roles should choose the most
_____________(loose/restrictive) applicable provisions and that will be the standards
applying to MIPPs
integrity and objectivity - Answers -tax consultants must act with integrity and objectivity
or independence?
adverse interest - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where the interest is not the same as the clients; ex:
client sues or threatens to sue
advocay - Answers -____________(adverse interest/advocacy/familiarity/management
participation/self-interest/self-review/undue influence) threats for MIPPs are where
members provide forensic accounting services to client in lawsuit with third party; firm
acts as investment advisor, underwriter, promoter, or registered agent for a client
familarity - Answers -____________(adverse interest/advocacy/familiarity/management
participation/self-interest/self-review/undue influence) threats for MIPPs are where
member's spouse or parent is employed by the client; or former partner joins client in a
key position
management participation - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where member takes on role of client management
self-interest - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where members have a financial interest in a client that
may be affected by the outcome of a professional services engagement; excessive
reliance on revenue from a single client
self-review - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where members relies on work product of the member's
firm; or member performs bookkeeping services for client
undue infleunec - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where client threatens to fire firm or to withhold future
,business; major shareholder of client threatens to terminate professional service unless
the member reaches certain judgements or conclusions
profession, legislation, or regulation - Answers -a safeguard implemented by
____________________ (profession, legislation, or regulation/client/firm) consists of
education requirements, professional standards and threats to discipline, and
competency and experience requirements for licensure
client - Answers -a safeguard implemented by ____________________ (profession,
legislation, or regulation/client/firm) consists of the client having personnel with suitable
skills, knowledge, or experience to make managerial decisions about the delivery of
professional services; tone at the top; policies and procedures are in place to address
ethical conduct
firm - Answers -a safeguard implemented by ____________________ (profession,
legislation, or regulation/client/firm) consists of policies and procedures designed to
implement and monitor engagement quality control
does not - Answers -if a CPA is not doing any attest-related work, the CPA ______
(does/does not) need to make a determination of independence
consultant - Answers -a MIPP can serve as a director or consultant to the board of
directors?
10% - Answers -gift and entertainment rules indicate that objectivity and integrity are
threatened if MIPPs receive gifts or entertainment from clients or its officers, directors,
or _____(5%/10%) shareholders
reasonable in the circumstances - Answers -if no rules have been violated for MIPPs
regarding gifts and entertainment, it must still be ________________ (reasonably
possible/ reasonable in the circumstances)
would not - Answers -it __________(would/would not) be an violation to the Code of
Professional Conduct to direct another to sign an accurate statement
true - Answers -true/false: MIPPs may not advocate for their attest clients
may - Answers -MIPPs providing advisory and tax services _____(may/may not
advocate for their clients, but should not threaten objectivity and integrity
administrative - Answers -MIPPs outsourcing with third-party service providers (TSPs)
________________(professional services/ administrative) support is not a problem; ex:
record storage or software application hosting
, should - Answers -MIPPs outsourcing with third-party service providers (TSPs)
professional services the client __________(should/should not) be notified before any
confidential information is provided to the TSP
professional competence - Answers -_________________(professional competence/
due professional care/ planning and supervision/ sufficient relevant data) is a general
standard MIPPs must follow in which the member or member's staff possess
appropriate technical qualifications and member can supervise and valuate the quality
of work performed
decline - Answers -if a member cannot obtain necessary knowledge through additional
research or consulting with experts, they should ____________-(accept/decline) the
engagement
false - Answers -true/false: clients have the right to veto the outsourcing of
administrative support of TSPs
t - Answers -t/f: client does not have to be informed in writing before any professional
services are outsourced
45 - Answers -generally, record requests should be honored within ________ days and
can be given in the form the accountant has, even if the clients asks for it electronically
client-provided - Answers -____________ (client-provided/member-prepared/member's
work products/ working papers) is a type of records request that is returned to the client
upon request, even if the client has not paid its bill to the member
member-prepared - Answers -____________ (client-provided/member-
prepared/member's work products/ working papers) is a type of records request that is
delivered upon request when related to a completed and issued work product, EXCEPT
that they may be withheld if fees are due for that specific work product
member's work products - Answers -____________ (client-provided/member-
prepared/member's work products/ working papers) is a type of records request that the
member provides upon request except that the may be withheld if:
- fees are due for the specific work product
- the work is incomplete
- to comply with professional standards
- if threatened or outstanding litigation exists concerning the engagement or the
member's work
working papers - Answers -____________ (client-provided/member-
prepared/member's work products/ working papers) is a type of records request that are
the member's property and need not be provided to the client, unless some regulation or
contractual provision requires production
unmodified or qualified - Answers -when the auditor is engaged to report on the
supplementary information, either _______________(unmodified or
qualified/unmodified/adverse) opinion was expressed on the FSs
key audit matters - Answers -_________________(key audit matters/significant events)
are those matters, in the auditor's professional judgement, were of most significance in
the audit of the FSs of the CURRENT period; selected matters communicated with
those charged with governance
responsibilities - Answers -________________(responsibilities/ public interest/
integrity/ objectivity and independence/due care/scope and nature of services) is one of
the six professional conduct principles where the members should exercise sensitive
professional and moral judgements. They should cooperate to improve the art of
accounting, maintain the public's confidence, and carry out the profession's special
responsibilities for self governance
public interest - Answers -________________(responsibilities/ public interest/ integrity/
objectivity and independence/due care/scope and nature of services) is one of the six
professional conduct principles where members should accept the obligation to act in a
way that will serve the public interest, honor the public interest, and demonstrate a
commitment to professionalism; acceptance to its responsibility to the public
integrity - Answers -________________(responsibilities/ public interest/ integrity/
objectivity and independence/due care/scope and nature of services) is one of the six
professional conduct principles to maintain and broaden confidence, members should
perform all professional responsibilities with the highest sense of integrity; measured in
terms of right and just
objectivity and independence - Answers -________________(responsibilities/ public
interest/ integrity/ objectivity and independence/due care/scope and nature of services)
is one of the six professional conduct principles where a member should maintain
objectivity and be free of conflicts of interest in discharging professional responsibilities;
a member should be independent in fact and appearance when providing auditing and
other attestation services
due care - Answers -________________(responsibilities/ public interest/ integrity/
objectivity and independence/due care/scope and nature of services) is one of the six
professional conduct principles where a member should leave observe the profession's
technical and ethical standards, strive continually to improve competence and the
quality of services, and discharge professional responsibility to the best of the member's
ability
,scope and nature of services - Answers -________________(responsibilities/ public
interest/ integrity/ objectivity and independence/due care/scope and nature of services)
is one of the six professional conduct principles where a member in public practice
observes the Principles Code of Professional Conduct in determining the scope and
nature of services to be provided
restrictive - Answers -a member serving multiple roles should choose the most
_____________(loose/restrictive) applicable provisions and that will be the standards
applying to MIPPs
integrity and objectivity - Answers -tax consultants must act with integrity and objectivity
or independence?
adverse interest - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where the interest is not the same as the clients; ex:
client sues or threatens to sue
advocay - Answers -____________(adverse interest/advocacy/familiarity/management
participation/self-interest/self-review/undue influence) threats for MIPPs are where
members provide forensic accounting services to client in lawsuit with third party; firm
acts as investment advisor, underwriter, promoter, or registered agent for a client
familarity - Answers -____________(adverse interest/advocacy/familiarity/management
participation/self-interest/self-review/undue influence) threats for MIPPs are where
member's spouse or parent is employed by the client; or former partner joins client in a
key position
management participation - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where member takes on role of client management
self-interest - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where members have a financial interest in a client that
may be affected by the outcome of a professional services engagement; excessive
reliance on revenue from a single client
self-review - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where members relies on work product of the member's
firm; or member performs bookkeeping services for client
undue infleunec - Answers -____________(adverse
interest/advocacy/familiarity/management participation/self-interest/self-review/undue
influence) threats for MIPPs are where client threatens to fire firm or to withhold future
,business; major shareholder of client threatens to terminate professional service unless
the member reaches certain judgements or conclusions
profession, legislation, or regulation - Answers -a safeguard implemented by
____________________ (profession, legislation, or regulation/client/firm) consists of
education requirements, professional standards and threats to discipline, and
competency and experience requirements for licensure
client - Answers -a safeguard implemented by ____________________ (profession,
legislation, or regulation/client/firm) consists of the client having personnel with suitable
skills, knowledge, or experience to make managerial decisions about the delivery of
professional services; tone at the top; policies and procedures are in place to address
ethical conduct
firm - Answers -a safeguard implemented by ____________________ (profession,
legislation, or regulation/client/firm) consists of policies and procedures designed to
implement and monitor engagement quality control
does not - Answers -if a CPA is not doing any attest-related work, the CPA ______
(does/does not) need to make a determination of independence
consultant - Answers -a MIPP can serve as a director or consultant to the board of
directors?
10% - Answers -gift and entertainment rules indicate that objectivity and integrity are
threatened if MIPPs receive gifts or entertainment from clients or its officers, directors,
or _____(5%/10%) shareholders
reasonable in the circumstances - Answers -if no rules have been violated for MIPPs
regarding gifts and entertainment, it must still be ________________ (reasonably
possible/ reasonable in the circumstances)
would not - Answers -it __________(would/would not) be an violation to the Code of
Professional Conduct to direct another to sign an accurate statement
true - Answers -true/false: MIPPs may not advocate for their attest clients
may - Answers -MIPPs providing advisory and tax services _____(may/may not
advocate for their clients, but should not threaten objectivity and integrity
administrative - Answers -MIPPs outsourcing with third-party service providers (TSPs)
________________(professional services/ administrative) support is not a problem; ex:
record storage or software application hosting
, should - Answers -MIPPs outsourcing with third-party service providers (TSPs)
professional services the client __________(should/should not) be notified before any
confidential information is provided to the TSP
professional competence - Answers -_________________(professional competence/
due professional care/ planning and supervision/ sufficient relevant data) is a general
standard MIPPs must follow in which the member or member's staff possess
appropriate technical qualifications and member can supervise and valuate the quality
of work performed
decline - Answers -if a member cannot obtain necessary knowledge through additional
research or consulting with experts, they should ____________-(accept/decline) the
engagement
false - Answers -true/false: clients have the right to veto the outsourcing of
administrative support of TSPs
t - Answers -t/f: client does not have to be informed in writing before any professional
services are outsourced
45 - Answers -generally, record requests should be honored within ________ days and
can be given in the form the accountant has, even if the clients asks for it electronically
client-provided - Answers -____________ (client-provided/member-prepared/member's
work products/ working papers) is a type of records request that is returned to the client
upon request, even if the client has not paid its bill to the member
member-prepared - Answers -____________ (client-provided/member-
prepared/member's work products/ working papers) is a type of records request that is
delivered upon request when related to a completed and issued work product, EXCEPT
that they may be withheld if fees are due for that specific work product
member's work products - Answers -____________ (client-provided/member-
prepared/member's work products/ working papers) is a type of records request that the
member provides upon request except that the may be withheld if:
- fees are due for the specific work product
- the work is incomplete
- to comply with professional standards
- if threatened or outstanding litigation exists concerning the engagement or the
member's work
working papers - Answers -____________ (client-provided/member-
prepared/member's work products/ working papers) is a type of records request that are
the member's property and need not be provided to the client, unless some regulation or
contractual provision requires production
