Minnesota Certified Public Accountant
Uniform CPA Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
Download Pdf
1. A CPA is performing an audit of financial statements and identifies a
risk of material misstatement due to fraud. Which of the following
procedures is most appropriate as a response?
A. Reduce substantive testing to maintain efficiency
B. Increase reliance on prior year audit evidence
C. Modify overall audit strategy and increase unpredictability of procedures
D. Eliminate analytical procedures to avoid bias
C
When fraud risk is identified, the auditor must respond by changing the
audit approach, including introducing unpredictability and more rigorous
procedures to obtain sufficient appropriate evidence.
, 2. Which financial statement assertion relates to recording transactions
in the proper accounting period?
A. Completeness
B. Cutoff
C. Classification
D. Occurrence
B
Cutoff ensures that transactions are recorded in the correct accounting
period, preventing overstatement or understatement of revenues and
expenses.
3. Under U.S. GAAP, which inventory costing method assumes the most
recent costs are expensed first?
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
B
LIFO assumes the latest inventory costs are assigned to cost of goods sold,
leaving older costs in ending inventory.
, 4. Which of the following is a component of internal control under
COSO?
A. Forecasting accuracy
B. Risk assessment
C. Earnings management
D. Revenue recognition policy
B
Risk assessment is one of the five COSO internal control components,
focusing on identifying and analyzing risks to objectives.
5. A CPA discovers a significant deficiency in internal control. What is the
auditor required to do?
A. Ignore it unless it is material
B. Communicate it in writing to management and those charged with
governance
C. Immediately withdraw from the engagement
D. Adjust the financial statements directly
B
Significant deficiencies must be communicated in writing to management
and those charged with governance as part of audit reporting
requirements.
, 6. Which of the following best describes materiality in auditing?
A. Absolute dollar threshold for all audits
B. The level at which financial information becomes misleading to users
C. A measure of audit risk
D. A substitute for audit evidence
B
Materiality is based on the significance of misstatements to users’
decisions, not a fixed numerical threshold.
7. Which audit opinion is issued when financial statements are fairly
presented except for a material misstatement that is not pervasive?
A. Adverse opinion
B. Disclaimer of opinion
C. Qualified opinion
D. Unmodified opinion
C
A qualified opinion is appropriate when misstatements are material but
not pervasive to the financial statements.
8. Which principle governs revenue recognition under ASC 606?
Uniform CPA Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
Download Pdf
1. A CPA is performing an audit of financial statements and identifies a
risk of material misstatement due to fraud. Which of the following
procedures is most appropriate as a response?
A. Reduce substantive testing to maintain efficiency
B. Increase reliance on prior year audit evidence
C. Modify overall audit strategy and increase unpredictability of procedures
D. Eliminate analytical procedures to avoid bias
C
When fraud risk is identified, the auditor must respond by changing the
audit approach, including introducing unpredictability and more rigorous
procedures to obtain sufficient appropriate evidence.
, 2. Which financial statement assertion relates to recording transactions
in the proper accounting period?
A. Completeness
B. Cutoff
C. Classification
D. Occurrence
B
Cutoff ensures that transactions are recorded in the correct accounting
period, preventing overstatement or understatement of revenues and
expenses.
3. Under U.S. GAAP, which inventory costing method assumes the most
recent costs are expensed first?
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
B
LIFO assumes the latest inventory costs are assigned to cost of goods sold,
leaving older costs in ending inventory.
, 4. Which of the following is a component of internal control under
COSO?
A. Forecasting accuracy
B. Risk assessment
C. Earnings management
D. Revenue recognition policy
B
Risk assessment is one of the five COSO internal control components,
focusing on identifying and analyzing risks to objectives.
5. A CPA discovers a significant deficiency in internal control. What is the
auditor required to do?
A. Ignore it unless it is material
B. Communicate it in writing to management and those charged with
governance
C. Immediately withdraw from the engagement
D. Adjust the financial statements directly
B
Significant deficiencies must be communicated in writing to management
and those charged with governance as part of audit reporting
requirements.
, 6. Which of the following best describes materiality in auditing?
A. Absolute dollar threshold for all audits
B. The level at which financial information becomes misleading to users
C. A measure of audit risk
D. A substitute for audit evidence
B
Materiality is based on the significance of misstatements to users’
decisions, not a fixed numerical threshold.
7. Which audit opinion is issued when financial statements are fairly
presented except for a material misstatement that is not pervasive?
A. Adverse opinion
B. Disclaimer of opinion
C. Qualified opinion
D. Unmodified opinion
C
A qualified opinion is appropriate when misstatements are material but
not pervasive to the financial statements.
8. Which principle governs revenue recognition under ASC 606?
