CPA AUDITING AND ATTESTATION (AUD) PRACTICE
EXAM – PAPER 2 | INTERMEDIATE LEVEL |
COMPREHENSIVE REVIEW WITH MODEL ANSWERS
& DETAILED EXPLANATIONS | 2026 EDITION
Course Name
Certified Public Accountant (CPA) – Auditing and Attestation (AUD)
Level
Professional Certification (Intermediate)
Short Introduction
This original CPA Auditing and Attestation (AUD) Practice Exam – Paper 2 is
designed to develop intermediate-level understanding of audit planning, risk
assessment, audit evidence, internal controls, ethical requirements, audit
procedures, and reporting responsibilities. It includes original exam-style questions
with model answers and detailed italicised explanations for CPA candidates
preparing for the AUD section.
Instructions
Answer all 40 questions.
Read each question carefully before selecting the best answer.
Apply auditing standards and professional judgment when responding.
Complete all calculations and written responses where required.
Review explanations after completing each section.
Exam Structure
15 Multiple Choice Questions
10 Short Answer Questions
10 Application / Scenario Questions
5 Higher-Order Thinking Questions
,Total Questions: 40
SECTION A – MULTIPLE CHOICE QUESTIONS
Question 1
An auditor's responsibility for obtaining reasonable assurance that financial
statements are free from material misstatement due to fraud or error requires the
auditor to:
A. Guarantee that all fraud will be detected.
B. Obtain sufficient appropriate audit evidence and assess risks of material
misstatement.
C. Prepare the client's accounting records.
D. Eliminate all business risks faced by the client.
Answer: B
Explanation: Auditors obtain reasonable assurance by assessing risks and
performing procedures designed to detect material misstatements.
Question 2
Which of the following represents a self-review threat to auditor independence?
A. Auditing financial statements prepared by another accounting firm.
B. Providing bookkeeping services and then auditing those financial statements.
C. Reviewing an independent valuation performed by a third party.
D. Performing an audit for a new client.
Answer: B
, Explanation: A self-review threat occurs when auditors evaluate their own
previous work or services they provided to the client.
Question 3
The primary purpose of audit planning is to:
A. Determine the client's future profitability.
B. Develop an effective audit strategy and approach.
C. Replace management's internal controls.
D. Guarantee detection of every fraud.
Answer: B
Explanation: Audit planning helps auditors identify risks, allocate resources, and
design appropriate audit procedures.
Question 4
Which audit evidence is generally considered the most reliable?
A. Management explanations
B. Internally generated reports without controls
C. External confirmations received directly by the auditor
D. Oral statements from employees
Answer: C
Explanation: Evidence obtained directly from independent external sources
generally provides greater reliability.
EXAM – PAPER 2 | INTERMEDIATE LEVEL |
COMPREHENSIVE REVIEW WITH MODEL ANSWERS
& DETAILED EXPLANATIONS | 2026 EDITION
Course Name
Certified Public Accountant (CPA) – Auditing and Attestation (AUD)
Level
Professional Certification (Intermediate)
Short Introduction
This original CPA Auditing and Attestation (AUD) Practice Exam – Paper 2 is
designed to develop intermediate-level understanding of audit planning, risk
assessment, audit evidence, internal controls, ethical requirements, audit
procedures, and reporting responsibilities. It includes original exam-style questions
with model answers and detailed italicised explanations for CPA candidates
preparing for the AUD section.
Instructions
Answer all 40 questions.
Read each question carefully before selecting the best answer.
Apply auditing standards and professional judgment when responding.
Complete all calculations and written responses where required.
Review explanations after completing each section.
Exam Structure
15 Multiple Choice Questions
10 Short Answer Questions
10 Application / Scenario Questions
5 Higher-Order Thinking Questions
,Total Questions: 40
SECTION A – MULTIPLE CHOICE QUESTIONS
Question 1
An auditor's responsibility for obtaining reasonable assurance that financial
statements are free from material misstatement due to fraud or error requires the
auditor to:
A. Guarantee that all fraud will be detected.
B. Obtain sufficient appropriate audit evidence and assess risks of material
misstatement.
C. Prepare the client's accounting records.
D. Eliminate all business risks faced by the client.
Answer: B
Explanation: Auditors obtain reasonable assurance by assessing risks and
performing procedures designed to detect material misstatements.
Question 2
Which of the following represents a self-review threat to auditor independence?
A. Auditing financial statements prepared by another accounting firm.
B. Providing bookkeeping services and then auditing those financial statements.
C. Reviewing an independent valuation performed by a third party.
D. Performing an audit for a new client.
Answer: B
, Explanation: A self-review threat occurs when auditors evaluate their own
previous work or services they provided to the client.
Question 3
The primary purpose of audit planning is to:
A. Determine the client's future profitability.
B. Develop an effective audit strategy and approach.
C. Replace management's internal controls.
D. Guarantee detection of every fraud.
Answer: B
Explanation: Audit planning helps auditors identify risks, allocate resources, and
design appropriate audit procedures.
Question 4
Which audit evidence is generally considered the most reliable?
A. Management explanations
B. Internally generated reports without controls
C. External confirmations received directly by the auditor
D. Oral statements from employees
Answer: C
Explanation: Evidence obtained directly from independent external sources
generally provides greater reliability.
