Audit CPA Prep
Audit CPA Exam Prep Questions and
Answers UPDATED 2025
1. An audit firm has a responsibility to adopt a system of quality control and
establish policies and procedures to provide reasonable assurance that personnel
comply with ______________. -Correct Answer ✔B). A firm of independent
auditors has a responsibility to adopt a system of quality control in conducting an
audit practice. Thus, a firm should establish quality control procedures to provide it
with reasonable assurance that its personnel comply with generally accepted
auditing standards (GAAS) in its audit engagements.
2. An audit firm has a responsibility to _______________ in accordance with the
applicable legal and regulatory requirements. -Correct Answer ✔A), B), and C). A
firm of independent auditors has a responsibility to adopt a system of quality
control in conducting an audit practice. Thus, a firm should establish quality
control procedures to provide it with reasonable assurance that its personnel
comply with generally accepted auditing standards in its audit engagements. AU-C
250 states that "the auditor should remain alert to the possibility that other audit
procedures applied may bring instances of noncompliance or suspected
noncompliance with laws and regulations to the auditor's attention." Also, AU-C
220 states that, "within the context of the firm's system of quality control,
engagement teams have a responsibility to implement quality control procedures
that are applicable to the audit engagement."
3. Quality control for a CPA firm applies to all ____________ services. -Correct
Answer ✔C) and D). Quality control for a CPA firm does not explicitly apply to
consulting and tax services, but quality control does apply to all review and
compilation services.
4. Quality control policies and procedures applicable to a CPA firm should
encompass the element(s) of ________________. -Correct Answer ✔A) and B).
The quality control policies and procedures applicable to a firm's accounting and
Audit CPA Prep
,Audit CPA Prep
auditing practice encompass the following elements: •Independence, integrity, and
objectivity
•Personnel management
•Acceptance and continuance of clients and engagements
•Engagement performance
•Monitoring
5. A CPA firm must appropriately document _______ to properly administer a
quality control system. -Correct Answer ✔A), C), and D). QC 10 states that the
firm should establish policies and procedures requiring (a) appropriate
documentation to provide evidence of the operation of each element of its system
of quality control, (b) retention of documentation for a period of time sufficient to
permit those performing monitoring procedures and peer review of the firm to
evaluate the firm's compliance with its system of quality control or for a longer
period if required by law or regulation, and (c) documentation of complaints and
allegations and responses to them.
6. The form and content of documentation evidencing the operation of each of the
elements of the system of quality control depend on factors such as
__________________. -Correct Answer ✔A), B), and C). QC 10 states, "The form
and content of documentation evidencing the operation of each of the elements of
the system of quality control is a matter of judgment and depends on a number of
factors, including the following: •The size of the firm and the number of offices
•The nature and complexity of the firm's practices and organization."
7. Public accounting firms establish a monitoring process involving
_____________ to provide reasonable assurance that policies relating to the
system of quality control are relevant, adequate, and operating effectively. -Correct
Answer ✔B) and C). QC 10 indicates that the firm should establish a monitoring
process to provide reasonable assurance that policies relating to the system of
quality control are relevant, adequate, and operating effectively. This process
should include an ongoing consideration and evaluation of the firm's system of
quality control, including inspection or a periodic review of engagement
Audit CPA Prep
, Audit CPA Prep
documentation, reports, and clients' financial statements for a selection of
completed engagements.
8. An effective system of quality control provides reasonable assurance that the
firm and personnel follow policies and procedures pertaining to
_________________. -Correct Answer ✔A), B), and C). QC 10 indicates that the
firm must establish and maintain a system of quality control, which should include
policies and procedures addressing each of the following elements:a.Leadership
responsibilities for quality within the firm (the tone at the top)
b.Relevant ethical requirements
c.Acceptance and continuance of client relationships and specific engagements
d.Human resources
e.Engagement performance
f.Monitoring
9. An effective system of quality control provides reasonable assurance that the
firm and personnel comply with the AICPA Code of Professional Conduct's
fundamental principles of professional ethics. These principles include
_________________. -Correct Answer ✔A), D), and E). QC 10 states, "The
AICPA Code of Professional Conduct establishes the fundamental principles of
professional ethics, which include the following:•Responsibilities
•The public interest
•Integrity
•Objectivity and independence
•Due care
•Scope and nature of services."
10. The timing of periodic inspections to evaluate quality control over the audits of
public companies by a CPA firm is dependent upon factors such as
___________________. -Correct Answer ✔A), B), and C). According to QC 10,
•The need for, and extent of, inspection procedures depends, in part, on the
existence and effectiveness of other monitoring procedures. The nature of
inspection procedures varies based on the firm's quality control policies and
procedures and the effectiveness and results of other monitoring procedures.
Audit CPA Prep
Audit CPA Exam Prep Questions and
Answers UPDATED 2025
1. An audit firm has a responsibility to adopt a system of quality control and
establish policies and procedures to provide reasonable assurance that personnel
comply with ______________. -Correct Answer ✔B). A firm of independent
auditors has a responsibility to adopt a system of quality control in conducting an
audit practice. Thus, a firm should establish quality control procedures to provide it
with reasonable assurance that its personnel comply with generally accepted
auditing standards (GAAS) in its audit engagements.
2. An audit firm has a responsibility to _______________ in accordance with the
applicable legal and regulatory requirements. -Correct Answer ✔A), B), and C). A
firm of independent auditors has a responsibility to adopt a system of quality
control in conducting an audit practice. Thus, a firm should establish quality
control procedures to provide it with reasonable assurance that its personnel
comply with generally accepted auditing standards in its audit engagements. AU-C
250 states that "the auditor should remain alert to the possibility that other audit
procedures applied may bring instances of noncompliance or suspected
noncompliance with laws and regulations to the auditor's attention." Also, AU-C
220 states that, "within the context of the firm's system of quality control,
engagement teams have a responsibility to implement quality control procedures
that are applicable to the audit engagement."
3. Quality control for a CPA firm applies to all ____________ services. -Correct
Answer ✔C) and D). Quality control for a CPA firm does not explicitly apply to
consulting and tax services, but quality control does apply to all review and
compilation services.
4. Quality control policies and procedures applicable to a CPA firm should
encompass the element(s) of ________________. -Correct Answer ✔A) and B).
The quality control policies and procedures applicable to a firm's accounting and
Audit CPA Prep
,Audit CPA Prep
auditing practice encompass the following elements: •Independence, integrity, and
objectivity
•Personnel management
•Acceptance and continuance of clients and engagements
•Engagement performance
•Monitoring
5. A CPA firm must appropriately document _______ to properly administer a
quality control system. -Correct Answer ✔A), C), and D). QC 10 states that the
firm should establish policies and procedures requiring (a) appropriate
documentation to provide evidence of the operation of each element of its system
of quality control, (b) retention of documentation for a period of time sufficient to
permit those performing monitoring procedures and peer review of the firm to
evaluate the firm's compliance with its system of quality control or for a longer
period if required by law or regulation, and (c) documentation of complaints and
allegations and responses to them.
6. The form and content of documentation evidencing the operation of each of the
elements of the system of quality control depend on factors such as
__________________. -Correct Answer ✔A), B), and C). QC 10 states, "The form
and content of documentation evidencing the operation of each of the elements of
the system of quality control is a matter of judgment and depends on a number of
factors, including the following: •The size of the firm and the number of offices
•The nature and complexity of the firm's practices and organization."
7. Public accounting firms establish a monitoring process involving
_____________ to provide reasonable assurance that policies relating to the
system of quality control are relevant, adequate, and operating effectively. -Correct
Answer ✔B) and C). QC 10 indicates that the firm should establish a monitoring
process to provide reasonable assurance that policies relating to the system of
quality control are relevant, adequate, and operating effectively. This process
should include an ongoing consideration and evaluation of the firm's system of
quality control, including inspection or a periodic review of engagement
Audit CPA Prep
, Audit CPA Prep
documentation, reports, and clients' financial statements for a selection of
completed engagements.
8. An effective system of quality control provides reasonable assurance that the
firm and personnel follow policies and procedures pertaining to
_________________. -Correct Answer ✔A), B), and C). QC 10 indicates that the
firm must establish and maintain a system of quality control, which should include
policies and procedures addressing each of the following elements:a.Leadership
responsibilities for quality within the firm (the tone at the top)
b.Relevant ethical requirements
c.Acceptance and continuance of client relationships and specific engagements
d.Human resources
e.Engagement performance
f.Monitoring
9. An effective system of quality control provides reasonable assurance that the
firm and personnel comply with the AICPA Code of Professional Conduct's
fundamental principles of professional ethics. These principles include
_________________. -Correct Answer ✔A), D), and E). QC 10 states, "The
AICPA Code of Professional Conduct establishes the fundamental principles of
professional ethics, which include the following:•Responsibilities
•The public interest
•Integrity
•Objectivity and independence
•Due care
•Scope and nature of services."
10. The timing of periodic inspections to evaluate quality control over the audits of
public companies by a CPA firm is dependent upon factors such as
___________________. -Correct Answer ✔A), B), and C). According to QC 10,
•The need for, and extent of, inspection procedures depends, in part, on the
existence and effectiveness of other monitoring procedures. The nature of
inspection procedures varies based on the firm's quality control policies and
procedures and the effectiveness and results of other monitoring procedures.
Audit CPA Prep
