AUD CPA EXAM NOTES 2026/2027
QUESTIONS AND VERIFIED
CORRECT SOLUTIONS GRADED A+
100% PASS
SU 1
Engagement Responsibilities
Nature of an Attest Engagement
Gives an assertion or opinion on the material of the responsible party. They only apply to a CPA
operating in public practice. Some services require a CPA to disclaim assurance.
Attestation Standards
General Standards (training, proficiency, knowledge). Should be measurable. CPA must
maintain independence.
Field Work Standards (planning and supervision & sufficient appropriate evidence)
Reporting Standards (Character of Engagement, conclusion, reservations, restrictions)
Acronym: TIPSC PE CCRR
Generally Accepted Auditing Standards and the International Auditing Standards
The General Standards were codified between GAAS and the AICPA's ASB. They basically
converge with international standards but still differ in some areas.
Who regulates issuers versus non-issuer audits?
,Issuers Audit = PCAOB, Non-issuer = ASB Standards
Who issues Government Audit Standards?
The yellowbook is the government standards and is issued by the Governmental Accountability
Office. It is ASB unless modified. Federal Awards may require a single audit which falls under
the OMB Single Audit Act.
Purpose of an Audit
To provide financial statement users with an opinion on whether the financial statements are
presented fairly in accordance with the applicable financial reporting framework and free from
material misstatement whether due to fraud or error.
Professional Skepticism
Required by auditors when performing an audit.
Audit Risk
The risk that an audit will not detect a material misstatement. There will always be audit risk, but
the goal is to get that risk as close to zero as possible.
Managements Assertions
CAVE CROC
Completeness
Accuracy
Valuation and Allocation
Existence
, Cutoff
Rights and Obligations
Occurrence
Classification and Understandability
Assertions about Transactions and Events (P&L and Cash Flows)
Occurrence, Completeness, Accuracy, Cutoff, Classification
Assertions about Account Balances (B/S)
Existence, Rights and Obligations, Completeness, Valuation and Allocation
Assertions about Presentation and Disclosure (Mainly notes to financial statements)
Occurrence and Rights and Obligations, Completeness, Classification and Understandability,
Accuracy and Valuation
PCAOB Assertions
Same as above but they do not explicitly address accuracy.
Professional Responsibilities of Auditors
Must comply with unconditional requirements (i.e. independence).
Additional Professional Services
QUESTIONS AND VERIFIED
CORRECT SOLUTIONS GRADED A+
100% PASS
SU 1
Engagement Responsibilities
Nature of an Attest Engagement
Gives an assertion or opinion on the material of the responsible party. They only apply to a CPA
operating in public practice. Some services require a CPA to disclaim assurance.
Attestation Standards
General Standards (training, proficiency, knowledge). Should be measurable. CPA must
maintain independence.
Field Work Standards (planning and supervision & sufficient appropriate evidence)
Reporting Standards (Character of Engagement, conclusion, reservations, restrictions)
Acronym: TIPSC PE CCRR
Generally Accepted Auditing Standards and the International Auditing Standards
The General Standards were codified between GAAS and the AICPA's ASB. They basically
converge with international standards but still differ in some areas.
Who regulates issuers versus non-issuer audits?
,Issuers Audit = PCAOB, Non-issuer = ASB Standards
Who issues Government Audit Standards?
The yellowbook is the government standards and is issued by the Governmental Accountability
Office. It is ASB unless modified. Federal Awards may require a single audit which falls under
the OMB Single Audit Act.
Purpose of an Audit
To provide financial statement users with an opinion on whether the financial statements are
presented fairly in accordance with the applicable financial reporting framework and free from
material misstatement whether due to fraud or error.
Professional Skepticism
Required by auditors when performing an audit.
Audit Risk
The risk that an audit will not detect a material misstatement. There will always be audit risk, but
the goal is to get that risk as close to zero as possible.
Managements Assertions
CAVE CROC
Completeness
Accuracy
Valuation and Allocation
Existence
, Cutoff
Rights and Obligations
Occurrence
Classification and Understandability
Assertions about Transactions and Events (P&L and Cash Flows)
Occurrence, Completeness, Accuracy, Cutoff, Classification
Assertions about Account Balances (B/S)
Existence, Rights and Obligations, Completeness, Valuation and Allocation
Assertions about Presentation and Disclosure (Mainly notes to financial statements)
Occurrence and Rights and Obligations, Completeness, Classification and Understandability,
Accuracy and Valuation
PCAOB Assertions
Same as above but they do not explicitly address accuracy.
Professional Responsibilities of Auditors
Must comply with unconditional requirements (i.e. independence).
Additional Professional Services
