AUD CPA Exam - Professional Responsibilities | Practice Questions & Verified Answers | 2026-2027
Under the ethical standards of the profession, which of the B) A policy-making position in the client's finance division.
following positions 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.
An integrated audit performed under the Sarbanes-Oxley C) Both
Act includes auditor opinion on
A) Financial Statements
B) Internal Control
C) Both
D) Neither
ABC Company is audited by the Albuquerque office of B) An audit partner in the Silver Springs office who performs no attest services for
Whitt CPAs. Which of the following individuals would be ABC Company.
least likely to be considered a "covered member" by the
AICPA Code of Professional Conduct independence
standard?
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).
Which of the following is not a broad category of B) Safeguards created by peers who performed the audit in the preceding year.
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.
Which of the following is required by International B) Require the identification of location of the auditor's office that audited the client.
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.
Which of the following is least likely to be directly C) Compilation engagements.
examined in an inspection performed by the PCAOB?
A) Audit engagements.
B) Review engagements.
C) Compilation engagements.
D) CPA firm quality control system.
,AUD CPA Exam - Professional Responsibilities | Practice Questions & Verified Answers | 2026-2027
Which of the following can cause a CPA to receive an D) I, II, and III.
automatic suspension from the AICPA?
I. The CPA's CPA certificate is revoked by the relevant
state board of accountancy.
II. The CPA is convicted of a crime punishable by more
than one year in jail.
III. 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.
Under the ethical standards of the profession, which of the C) An investment held through a regulated mutual fund.
following investments 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.
Each of the following is a required attribute of an issuer's B) Significant audit experience as a certified public accountant.
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.
Each of the following broker-dealer relationships impairs D) The auditor has a cash balance in a brokerage account that is fully covered by
auditor independence with respect to a broker-dealer the Securities Investor Protection Corporation.
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.
When a threat to independence arises that is not B) Available safeguards to independence.
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.
Which of the following is not a section title ordinarily B) Board of directors overall responsibility.
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.
, AUD CPA Exam - Professional Responsibilities | Practice Questions & Verified Answers | 2026-2027
According to the SEC, an auditor is not independent of its C) The auditor has an investment in an entity that has the ability to exercise
issuer audit client in which of the following situations: significant influence over the audit client.
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.
A CPA firm must do which of the following before it can B) Register with the Public Company Accounting Oversight Board.
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).
D) Register with the SEC pursuant to the Securities
Exchange Act of 1934.
Which of the following is correct concerning PCAOB B) Inspections may include consideration of aspects of practice management, such
inspections? as how partner compensation is determined.
A) Engagements and audit areas to be inspected are
selected randomly, without consideration of risk aspects.
B) Inspections may include consideration of aspects of
practice management, such as how partner compensation
is determined.
C) When a lack of compliance with standards is identified,
the PCAOB staff attempts to determine the cause, which
will ultimately lead to identification of a defect in a CPA
firm's quality control system.
D) All public company audits are inspected.
The Government Accountability Office (GAO): B) Conducts operational audits and reports the results to Congress.
A) Is primarily concerned with rapid processing of all
accounts payable incurred by the federal government.
B) Conducts operational audits and reports the results to
Congress.
C) Is a multinational organization of professional
accountants.
D) Is primarily concerned with budgets and forecasts
approved by the SEC:
Coverage of International Auditing and Assurance C) Both
Standards Board pronouncements includes
A) Financial Statements Reviews
B) Firm quality control
C) Both
D) Neither
According to the AICPA Code of Professional Conduct, C) Only direct and material indirect financial interests.
which of the following financial interests in the client during
the period of the engagement impairs a CPA's
independence?
A) All direct and indirect financial interests.
B) Only direct financial interests.
C) Only direct and material indirect financial interests.
D) Only material financial interests.
Under the ethical standards of the profession, which of the B) A policy-making position in the client's finance division.
following positions 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.
An integrated audit performed under the Sarbanes-Oxley C) Both
Act includes auditor opinion on
A) Financial Statements
B) Internal Control
C) Both
D) Neither
ABC Company is audited by the Albuquerque office of B) An audit partner in the Silver Springs office who performs no attest services for
Whitt CPAs. Which of the following individuals would be ABC Company.
least likely to be considered a "covered member" by the
AICPA Code of Professional Conduct independence
standard?
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).
Which of the following is not a broad category of B) Safeguards created by peers who performed the audit in the preceding year.
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.
Which of the following is required by International B) Require the identification of location of the auditor's office that audited the client.
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.
Which of the following is least likely to be directly C) Compilation engagements.
examined in an inspection performed by the PCAOB?
A) Audit engagements.
B) Review engagements.
C) Compilation engagements.
D) CPA firm quality control system.
,AUD CPA Exam - Professional Responsibilities | Practice Questions & Verified Answers | 2026-2027
Which of the following can cause a CPA to receive an D) I, II, and III.
automatic suspension from the AICPA?
I. The CPA's CPA certificate is revoked by the relevant
state board of accountancy.
II. The CPA is convicted of a crime punishable by more
than one year in jail.
III. 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.
Under the ethical standards of the profession, which of the C) An investment held through a regulated mutual fund.
following investments 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.
Each of the following is a required attribute of an issuer's B) Significant audit experience as a certified public accountant.
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.
Each of the following broker-dealer relationships impairs D) The auditor has a cash balance in a brokerage account that is fully covered by
auditor independence with respect to a broker-dealer the Securities Investor Protection Corporation.
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.
When a threat to independence arises that is not B) Available safeguards to independence.
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.
Which of the following is not a section title ordinarily B) Board of directors overall responsibility.
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.
, AUD CPA Exam - Professional Responsibilities | Practice Questions & Verified Answers | 2026-2027
According to the SEC, an auditor is not independent of its C) The auditor has an investment in an entity that has the ability to exercise
issuer audit client in which of the following situations: significant influence over the audit client.
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.
A CPA firm must do which of the following before it can B) Register with the Public Company Accounting Oversight Board.
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).
D) Register with the SEC pursuant to the Securities
Exchange Act of 1934.
Which of the following is correct concerning PCAOB B) Inspections may include consideration of aspects of practice management, such
inspections? as how partner compensation is determined.
A) Engagements and audit areas to be inspected are
selected randomly, without consideration of risk aspects.
B) Inspections may include consideration of aspects of
practice management, such as how partner compensation
is determined.
C) When a lack of compliance with standards is identified,
the PCAOB staff attempts to determine the cause, which
will ultimately lead to identification of a defect in a CPA
firm's quality control system.
D) All public company audits are inspected.
The Government Accountability Office (GAO): B) Conducts operational audits and reports the results to Congress.
A) Is primarily concerned with rapid processing of all
accounts payable incurred by the federal government.
B) Conducts operational audits and reports the results to
Congress.
C) Is a multinational organization of professional
accountants.
D) Is primarily concerned with budgets and forecasts
approved by the SEC:
Coverage of International Auditing and Assurance C) Both
Standards Board pronouncements includes
A) Financial Statements Reviews
B) Firm quality control
C) Both
D) Neither
According to the AICPA Code of Professional Conduct, C) Only direct and material indirect financial interests.
which of the following financial interests in the client during
the period of the engagement impairs a CPA's
independence?
A) All direct and indirect financial interests.
B) Only direct financial interests.
C) Only direct and material indirect financial interests.
D) Only material financial interests.
