AUD - CPA EXAM QUESTIONS AND 100% CORRECT
ANSWERS RATED A+ 2025
Under the ethical standards of the profession, which of the following
posi- tions would be considered a position of significant influence in an
audit client?
a. A marketing position related to the client's primary products.
b. A policy-making position in the client's finance division.
c. A staff position in the client's research and development division.
d. A senior position in the client's human resources division.: B) A
policy-making position in the client's finance division.
An integrated audit performed under the Sarbanes-Oxley Act includes
au- ditor opinion on
a. Financial Statements
b. Internal Control
c. Both
d. Neither: C) Both
ABC Company is audited by the Albuquerque office of Whitt CPAs.
Which of the following individuals would be least likely to be
considered a "covered member" by the AICPA Code of Professional
Conduct independence stan- dard?
a. Staff assistant on the audit.
b. An audit partner in the Silver Springs office who performs no attest
services for ABC Company.
c. A tax partner in Albuquerque who performs no attest services for
ABC Company or for any other firm clients.
d. The partner in charge of Whitt CPAs (she does not work on the ABC
Company audit).: B) An audit partner in the Silver Springs office who performs
no attest services for ABC Company.
Which of the following is not a broad category of safeguards that
mitigate or eliminate threats to independence?
a. Safeguards created by the profession, legislation, or regulation.
,b. Safeguards created by peers who performed the audit in the
preceding year.
c. Safeguards implemented by the firm, including policies and
procedures to implement professional and regulatory requirements.
d. Safeguards implemented by the attest client.: B) Safeguards created by
peers who performed the audit in the preceding year.
Which of the following is required by International Standards on
Auditing?
a. Require management to sign the report in addition to the auditor.
b. Require the identification of location of the auditor's office that
audited the client.
c. Require an opinion on internal control.
d. Require the report to be signed in the name of the audit partner.: B)
Require the identification of location of the auditor's office that audited the client.
Which of the following is least likely to be directly examined in an
inspection performed by the PCAOB?
a. Audit engagements.
b. Review engagements.
c. Compilation engagements.
d. CPA firm quality control system.: C) Compilation engagements.
Which of the following can cause a CPA to receive an automatic
suspension from the AICPA?
I. The CPA's CPA certificate is revoked by the relevant state board of
accoun- tancy.
II. The CPA is convicted of a crime punishable by more than one year
in jail.
IV. The CPA intentionally did not file his personal tax return as
required by federal law.
a. I only.
b. II only.
,c. I and II only.
d. I, II, and III.: D) I, II, and III.
Under the ethical standards of the profession, which of the following
invest- ments by a CPA in a corporate client is an indirect financial
interest?
a. An investment held in a retirement plan.
b. An investment held in a blind trust.
c. An investment held through a regulated mutual fund.
d. An investment held through participation in an investment club.: C)
An investment held through a regulated mutual fund.
Each of the following is a required attribute of an issuer's audit
committee financial expert, except
a. The ability to assess the application of accounting principles in
connection with estimates, accruals, and reserves.
b. Significant audit experience as a certified public accountant.
c. An understanding of internal controls related to financial reporting.
d. An understanding of generally accepted accounting principles.: B)
Signifi- cant audit experience as a certified public accountant.
Each of the following broker-dealer relationships impairs auditor
indepen- dence with respect to a broker-dealer issuer audit client,
except:
a. The auditor has a brokerage account that holds both U.S. securities
and assets other than cash or securities.
b. The auditor has a brokerage account that holds U.S. securities in
excess of Securities Investor Protection Corporation coverage limits.
c. The auditor has a brokerage account that includes assets other
than cash or securities.
d. The auditor has a cash balance in a brokerage account that is fully
covered by the Securities Investor Protection Corporation.: D) The
auditor has a cash balance in a brokerage account that is fully covered by the
Securities Investor Protection Corporation.
, When a threat to independence arises that is not specifically
considered in the Code of Professional Conduct an auditor should
consider
a. Alternative threats to a lack of independence.
b. Available safeguards to independence.
c. Global independence rules.
d. Required lack of independence approaches.: B) Available safeguards to
inde- pendence.
Which of the following is not a section title ordinarily included in an
international audit report?
a. Auditor's responsibility.
b. Board of directors overall responsibility.
c. Management's responsibility for the financial statements.
d. Opinion.: B) Board of directors overall responsibility.
According to the SEC, an auditor is not independent of its issuer audit
client in which of the following situations:
a. The auditor's cousin has an insurance policy obtained from the
issuer before it became an audit client.
b. The auditor has an automobile loan at standard terms from the
audit client that is collateralized by the automobile.
c. The auditor has an investment in an entity that has the ability to
exercise significant influence over the audit client.
d. The auditor's grandparent was in an accounting role at the audit
client and ended employment before the period under audit began.: C)
The auditor has an investment in an entity that has the ability to exercise significant
influence over the audit client.
A CPA firm must do which of the following before it can participate in
the preparation of an audit report of a company registered with the
Securities and Exchange Commission (SEC)?
a. Join the SEC Practice Section of the AICPA.
b. Register with the Public Company Accounting Oversight Board.
c. Register with the Financial Accounting Standards Board (FASB).
ANSWERS RATED A+ 2025
Under the ethical standards of the profession, which of the following
posi- tions would be considered a position of significant influence in an
audit client?
a. A marketing position related to the client's primary products.
b. A policy-making position in the client's finance division.
c. A staff position in the client's research and development division.
d. A senior position in the client's human resources division.: B) A
policy-making position in the client's finance division.
An integrated audit performed under the Sarbanes-Oxley Act includes
au- ditor opinion on
a. Financial Statements
b. Internal Control
c. Both
d. Neither: C) Both
ABC Company is audited by the Albuquerque office of Whitt CPAs.
Which of the following individuals would be least likely to be
considered a "covered member" by the AICPA Code of Professional
Conduct independence stan- dard?
a. Staff assistant on the audit.
b. An audit partner in the Silver Springs office who performs no attest
services for ABC Company.
c. A tax partner in Albuquerque who performs no attest services for
ABC Company or for any other firm clients.
d. The partner in charge of Whitt CPAs (she does not work on the ABC
Company audit).: B) An audit partner in the Silver Springs office who performs
no attest services for ABC Company.
Which of the following is not a broad category of safeguards that
mitigate or eliminate threats to independence?
a. Safeguards created by the profession, legislation, or regulation.
,b. Safeguards created by peers who performed the audit in the
preceding year.
c. Safeguards implemented by the firm, including policies and
procedures to implement professional and regulatory requirements.
d. Safeguards implemented by the attest client.: B) Safeguards created by
peers who performed the audit in the preceding year.
Which of the following is required by International Standards on
Auditing?
a. Require management to sign the report in addition to the auditor.
b. Require the identification of location of the auditor's office that
audited the client.
c. Require an opinion on internal control.
d. Require the report to be signed in the name of the audit partner.: B)
Require the identification of location of the auditor's office that audited the client.
Which of the following is least likely to be directly examined in an
inspection performed by the PCAOB?
a. Audit engagements.
b. Review engagements.
c. Compilation engagements.
d. CPA firm quality control system.: C) Compilation engagements.
Which of the following can cause a CPA to receive an automatic
suspension from the AICPA?
I. The CPA's CPA certificate is revoked by the relevant state board of
accoun- tancy.
II. The CPA is convicted of a crime punishable by more than one year
in jail.
IV. The CPA intentionally did not file his personal tax return as
required by federal law.
a. I only.
b. II only.
,c. I and II only.
d. I, II, and III.: D) I, II, and III.
Under the ethical standards of the profession, which of the following
invest- ments by a CPA in a corporate client is an indirect financial
interest?
a. An investment held in a retirement plan.
b. An investment held in a blind trust.
c. An investment held through a regulated mutual fund.
d. An investment held through participation in an investment club.: C)
An investment held through a regulated mutual fund.
Each of the following is a required attribute of an issuer's audit
committee financial expert, except
a. The ability to assess the application of accounting principles in
connection with estimates, accruals, and reserves.
b. Significant audit experience as a certified public accountant.
c. An understanding of internal controls related to financial reporting.
d. An understanding of generally accepted accounting principles.: B)
Signifi- cant audit experience as a certified public accountant.
Each of the following broker-dealer relationships impairs auditor
indepen- dence with respect to a broker-dealer issuer audit client,
except:
a. The auditor has a brokerage account that holds both U.S. securities
and assets other than cash or securities.
b. The auditor has a brokerage account that holds U.S. securities in
excess of Securities Investor Protection Corporation coverage limits.
c. The auditor has a brokerage account that includes assets other
than cash or securities.
d. The auditor has a cash balance in a brokerage account that is fully
covered by the Securities Investor Protection Corporation.: D) The
auditor has a cash balance in a brokerage account that is fully covered by the
Securities Investor Protection Corporation.
, When a threat to independence arises that is not specifically
considered in the Code of Professional Conduct an auditor should
consider
a. Alternative threats to a lack of independence.
b. Available safeguards to independence.
c. Global independence rules.
d. Required lack of independence approaches.: B) Available safeguards to
inde- pendence.
Which of the following is not a section title ordinarily included in an
international audit report?
a. Auditor's responsibility.
b. Board of directors overall responsibility.
c. Management's responsibility for the financial statements.
d. Opinion.: B) Board of directors overall responsibility.
According to the SEC, an auditor is not independent of its issuer audit
client in which of the following situations:
a. The auditor's cousin has an insurance policy obtained from the
issuer before it became an audit client.
b. The auditor has an automobile loan at standard terms from the
audit client that is collateralized by the automobile.
c. The auditor has an investment in an entity that has the ability to
exercise significant influence over the audit client.
d. The auditor's grandparent was in an accounting role at the audit
client and ended employment before the period under audit began.: C)
The auditor has an investment in an entity that has the ability to exercise significant
influence over the audit client.
A CPA firm must do which of the following before it can participate in
the preparation of an audit report of a company registered with the
Securities and Exchange Commission (SEC)?
a. Join the SEC Practice Section of the AICPA.
b. Register with the Public Company Accounting Oversight Board.
c. Register with the Financial Accounting Standards Board (FASB).
