AUD CPA Exam with Answers
An accountant is required to comply with the provisions of the Statements on Standards for
Accounting and Review Services (SSARS) when performing which of the following tasks?
A) Preparing monthly journal entries.
B) Providing the client with software to generate financial statements.
C) Preparing financial statements of a nonissuer.
D) Providing a blank financial statement format or template. - CORRECT
ANSWER✅✅✅C) Preparing financial statements of a nonissuer.
Hart, CPA, is engaged to review the year-2 financial statements of Kell Co., a nonissuer.
Previously, Hart audited Kell's year-1 financial statements and expressed a qualified opinion due
to a scope limitation. Hart decides to include a separate paragraph in the year-2 review report
because comparative financial statements are being presented for year 2 and year 1. This separate
paragraph should indicate the
A) Substantive reasons for the prior year's qualified opinion.
B) Reason for changing the level of service from an audit to a review.
C) Consistency of application of accounting principles between year 2 and year 1.
D) Restriction on the distribution of the report for internal use only. - CORRECT
ANSWER✅✅✅A) Substantive reasons for the prior year's qualified opinion.
Which of the following would not be included in a CPA's report based upon a review of the
financial statements of a nonpublic entity?
A) A statement that the review was in accordance with generally accepted auditing standards.
B) A statement that all information included in the financial statements are the representations of
management.
C) A statement describing the principal procedures performed.
,D) A statement describing the auditor's conclusions based upon the results of the review. -
CORRECT ANSWER✅✅✅A) A statement that the review was in accordance with
generally accepted auditing standards.
An accountant's compilation report should be dated as of the date of
A) Completion of fieldwork.
B) Completion of the required compilation procedures.
C) Transmittal of the compilation report.
D) The latest subsequent event referred to in the notes to the financial statements. - CORRECT
ANSWER✅✅✅B) Completion of the required compilation procedures.
Which of the following circumstances requires modification of the accountant's report on a
review of interim financial information of a publicly held entity?
A) Inconsistent accounting principles
B) Inadequate disclosure
C) Both
D) Neither - CORRECT ANSWER✅✅✅B) Inadequate disclosure
A nonissuer has asked an accountant to compile its financial statements that omit substantially all
disclosures required by generally accepted accounting principles (GAAP). The accountant may
comply with the entity's request provided that the
A) Financial statements are compiled in conformity with a comprehensive basis of accounting
other than GAAP.
B) Financial statements will not be used to obtain credit from a third-party financial institution.
C) Omission is not employed in order to mislead the users of the financial statements and is
properly disclosed in the accountant's report.
D) Omission is acknowledged in the notes to the financial statements and is consistent with the
prior-year's financial statements. - CORRECT ANSWER✅✅✅C) Omission is not employed
,in order to mislead the users of the financial statements and is properly disclosed in the
accountant's report.
A compilation report should state all of the following except
A) The accountant does not express an opinion or any other form of assurance on them.
B) A compilation has been performed.
C) The city and state where the accountant practices.
D) A compilation consists principally of inquiries of company personnel and analytical
procedures applied to financial data. - CORRECT ANSWER✅✅✅D) A compilation
consists principally of inquiries of company personnel and analytical procedures applied to
financial data.
When making a review of interim financial information the auditor's work consists primarily of
A) Studying and evaluating limited amounts of documentation supporting the interim financial
information.
B) Scanning and reviewing client-prepared, internal financial statements.
C) Making inquiries and performing analytical procedures concerning significant accounting
matters.
D) Confirming and verifying significant account balances at the interim date. - CORRECT
ANSWER✅✅✅C) Making inquiries and performing analytical procedures concerning
significant accounting matters.
Which of the following statements should not be included in an accountant's standard report
based on the compilation of an entity's financial statements?
A) A statement that the compilation was performed in accordance with standards promulgated by
the Accounting and Review Services Committee of the AICPA.
B) A statement that the accountant has not audited or reviewed the financial statements.
C) A statement that the accountant does not express an opinion but expresses only limited
assurance on the financial statements.
, D) A statement that management is responsible for the financial statements. - CORRECT
ANSWER✅✅✅C) A statement that the accountant does not express an opinion but
expresses only limited assurance on the financial statements.
An accountant's standard report on a compilation of a projection should not include a statement
that
A) There will usually be differences between the forecasted and actual results.
B) The hypothetical assumptions used in the projection are reasonable in the circumstances.
C) The accountant has no responsibility to update the report for future events and circumstances.
D) The compilation of a projection is limited in scope. - CORRECT ANSWER✅✅✅B) The
hypothetical assumptions used in the projection are reasonable in the circumstances.
Is independence required when an accountant is engaged to either prepare or compile a client's
financial statements?
A) Yes for both
B) No to both
C) To prepare
D) To compile - CORRECT ANSWER✅✅✅B) No to both
Performing inquiry and analytical procedures is the primary basis for an accountant to issue a
A) Report on compliance with requirements governing major federal assistance programs in
accordance with the Single Audit Act.
B) Review report on prospective financial statements that present an entity's expected financial
position, given one or more hypothetical assumptions.
C) Management advisory report prepared at the request of a client's audit committee.
D) Review report on comparative financial statements for a nonpublic entity in its second year of
operations. - CORRECT ANSWER✅✅✅D) Review report on comparative financial
statements for a nonpublic entity in its second year of operations.
An accountant is required to comply with the provisions of the Statements on Standards for
Accounting and Review Services (SSARS) when performing which of the following tasks?
A) Preparing monthly journal entries.
B) Providing the client with software to generate financial statements.
C) Preparing financial statements of a nonissuer.
D) Providing a blank financial statement format or template. - CORRECT
ANSWER✅✅✅C) Preparing financial statements of a nonissuer.
Hart, CPA, is engaged to review the year-2 financial statements of Kell Co., a nonissuer.
Previously, Hart audited Kell's year-1 financial statements and expressed a qualified opinion due
to a scope limitation. Hart decides to include a separate paragraph in the year-2 review report
because comparative financial statements are being presented for year 2 and year 1. This separate
paragraph should indicate the
A) Substantive reasons for the prior year's qualified opinion.
B) Reason for changing the level of service from an audit to a review.
C) Consistency of application of accounting principles between year 2 and year 1.
D) Restriction on the distribution of the report for internal use only. - CORRECT
ANSWER✅✅✅A) Substantive reasons for the prior year's qualified opinion.
Which of the following would not be included in a CPA's report based upon a review of the
financial statements of a nonpublic entity?
A) A statement that the review was in accordance with generally accepted auditing standards.
B) A statement that all information included in the financial statements are the representations of
management.
C) A statement describing the principal procedures performed.
,D) A statement describing the auditor's conclusions based upon the results of the review. -
CORRECT ANSWER✅✅✅A) A statement that the review was in accordance with
generally accepted auditing standards.
An accountant's compilation report should be dated as of the date of
A) Completion of fieldwork.
B) Completion of the required compilation procedures.
C) Transmittal of the compilation report.
D) The latest subsequent event referred to in the notes to the financial statements. - CORRECT
ANSWER✅✅✅B) Completion of the required compilation procedures.
Which of the following circumstances requires modification of the accountant's report on a
review of interim financial information of a publicly held entity?
A) Inconsistent accounting principles
B) Inadequate disclosure
C) Both
D) Neither - CORRECT ANSWER✅✅✅B) Inadequate disclosure
A nonissuer has asked an accountant to compile its financial statements that omit substantially all
disclosures required by generally accepted accounting principles (GAAP). The accountant may
comply with the entity's request provided that the
A) Financial statements are compiled in conformity with a comprehensive basis of accounting
other than GAAP.
B) Financial statements will not be used to obtain credit from a third-party financial institution.
C) Omission is not employed in order to mislead the users of the financial statements and is
properly disclosed in the accountant's report.
D) Omission is acknowledged in the notes to the financial statements and is consistent with the
prior-year's financial statements. - CORRECT ANSWER✅✅✅C) Omission is not employed
,in order to mislead the users of the financial statements and is properly disclosed in the
accountant's report.
A compilation report should state all of the following except
A) The accountant does not express an opinion or any other form of assurance on them.
B) A compilation has been performed.
C) The city and state where the accountant practices.
D) A compilation consists principally of inquiries of company personnel and analytical
procedures applied to financial data. - CORRECT ANSWER✅✅✅D) A compilation
consists principally of inquiries of company personnel and analytical procedures applied to
financial data.
When making a review of interim financial information the auditor's work consists primarily of
A) Studying and evaluating limited amounts of documentation supporting the interim financial
information.
B) Scanning and reviewing client-prepared, internal financial statements.
C) Making inquiries and performing analytical procedures concerning significant accounting
matters.
D) Confirming and verifying significant account balances at the interim date. - CORRECT
ANSWER✅✅✅C) Making inquiries and performing analytical procedures concerning
significant accounting matters.
Which of the following statements should not be included in an accountant's standard report
based on the compilation of an entity's financial statements?
A) A statement that the compilation was performed in accordance with standards promulgated by
the Accounting and Review Services Committee of the AICPA.
B) A statement that the accountant has not audited or reviewed the financial statements.
C) A statement that the accountant does not express an opinion but expresses only limited
assurance on the financial statements.
, D) A statement that management is responsible for the financial statements. - CORRECT
ANSWER✅✅✅C) A statement that the accountant does not express an opinion but
expresses only limited assurance on the financial statements.
An accountant's standard report on a compilation of a projection should not include a statement
that
A) There will usually be differences between the forecasted and actual results.
B) The hypothetical assumptions used in the projection are reasonable in the circumstances.
C) The accountant has no responsibility to update the report for future events and circumstances.
D) The compilation of a projection is limited in scope. - CORRECT ANSWER✅✅✅B) The
hypothetical assumptions used in the projection are reasonable in the circumstances.
Is independence required when an accountant is engaged to either prepare or compile a client's
financial statements?
A) Yes for both
B) No to both
C) To prepare
D) To compile - CORRECT ANSWER✅✅✅B) No to both
Performing inquiry and analytical procedures is the primary basis for an accountant to issue a
A) Report on compliance with requirements governing major federal assistance programs in
accordance with the Single Audit Act.
B) Review report on prospective financial statements that present an entity's expected financial
position, given one or more hypothetical assumptions.
C) Management advisory report prepared at the request of a client's audit committee.
D) Review report on comparative financial statements for a nonpublic entity in its second year of
operations. - CORRECT ANSWER✅✅✅D) Review report on comparative financial
statements for a nonpublic entity in its second year of operations.
