CPA EXAM -AUD |ACTUAL QUESTIONS AND
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
Which of the following represents an appropriate overall response to an increase in
financial statement level risk?
a. Changing the general approach of the audit to ensure control testing of all significant
accounts.
b. Providing management with more specific details about audit sampling procedures.
c. Shifting substantive procedures to interim.
d. Increasing the level of supervision.
CORRECT ANSWER
d. Increasing the level of supervision.
Question 2
Using a combined approach with most likely involve:
a. Changing the timing of substantive tests by omitting interim-date testing and performing
the tests at year-end.
b. Reducing inherent risk for most of the assertions relevant to significant account balances.
1
,c. Identifying specific internal controls relevant to specific assertions.
d. Performing more extensive substantive tests with later sample sizes than originally
planned.
CORRECT ANSWER
c. Identifying specific internal controls relevant to specific assertions.
Question 3
Which of the following auditor concerns most likely would be so serious that the auditor
would conclude that a financial statement audit CANNOT be performed?
a. Management has imposed a restriction that the auditor believes will result in a qualified
opinion.
b. A portion of supporting evidence stored at an offsite storage facility was destroyed by a
hurricane.
c. The CPA lacks experience in the client's operations and industry.
d. There is substantial risk of management intentionally manipulating accounting records.
CORRECT ANSWER
d. There is substantial risk of management intentionally manipulating accounting
records.
Question 4
Before accepting a new client engagement, an auditor should:
2
,a. Evaluate management's integrity through review of the management representation
letter.
b. Assess the auditor's ability to appropriately staff the potential engagement.
c. Establish an understanding with the potential client as to a preliminary measure of
materiality.
d. Contact the predecessor auditor and arrange to review the audit files from the previous
year's audit.
CORRECT ANSWER
b. Assess the auditor's ability to appropriately staff the potential engagement.
Question 5
Which of the following statements is correct about an auditor's required communication
with those charged with governance?
a. The auditor should not communicate frequently recurring misstatements unless they are
material.
b. Any matters communicated to those charged with governance also are required to be
communicated to the entity's management.
c. Disagreements with management about the application of accounting principles must be
communicated in writing to those charged with governance.
d. The auditor is required to inform those charged with governance about significant
misstatements discovered by the auditor and subsequently corrected by management.
CORRECT ANSWER
3
, d. The auditor is required to inform those charged with governance about significant
misstatements discovered by the auditor and subsequently corrected by management.
Question 6
Which of the following items are included in the auditor's communication to those
charged with governance and in management's representation letter to the auditor?
I. The auditor's responsibility under generally accepted auditing standards.
II. Management's responsibility for fair presentation of the financial statements in
conformity with generally accepted accounting principles.
III. Uncorrected, nontrivial misstatements identified by the auditor.
Auditor's Comm. to Governance vs. Mgmt Rep Letter
a. I & III only vs. II & III only
b. I only vs. II only
c. I, II, & III vs. I & II only
d. I & II only vs. I, II, & III
CORRECT ANSWER
a. I & III only vs. II & III only
Question 7
U.S. GAAS do NOT require a written communication to those charged with governance to
include:
a. The adequacy of the financial statement disclosures.
b. An overview of the planned scope and timing of the audit.
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VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
Which of the following represents an appropriate overall response to an increase in
financial statement level risk?
a. Changing the general approach of the audit to ensure control testing of all significant
accounts.
b. Providing management with more specific details about audit sampling procedures.
c. Shifting substantive procedures to interim.
d. Increasing the level of supervision.
CORRECT ANSWER
d. Increasing the level of supervision.
Question 2
Using a combined approach with most likely involve:
a. Changing the timing of substantive tests by omitting interim-date testing and performing
the tests at year-end.
b. Reducing inherent risk for most of the assertions relevant to significant account balances.
1
,c. Identifying specific internal controls relevant to specific assertions.
d. Performing more extensive substantive tests with later sample sizes than originally
planned.
CORRECT ANSWER
c. Identifying specific internal controls relevant to specific assertions.
Question 3
Which of the following auditor concerns most likely would be so serious that the auditor
would conclude that a financial statement audit CANNOT be performed?
a. Management has imposed a restriction that the auditor believes will result in a qualified
opinion.
b. A portion of supporting evidence stored at an offsite storage facility was destroyed by a
hurricane.
c. The CPA lacks experience in the client's operations and industry.
d. There is substantial risk of management intentionally manipulating accounting records.
CORRECT ANSWER
d. There is substantial risk of management intentionally manipulating accounting
records.
Question 4
Before accepting a new client engagement, an auditor should:
2
,a. Evaluate management's integrity through review of the management representation
letter.
b. Assess the auditor's ability to appropriately staff the potential engagement.
c. Establish an understanding with the potential client as to a preliminary measure of
materiality.
d. Contact the predecessor auditor and arrange to review the audit files from the previous
year's audit.
CORRECT ANSWER
b. Assess the auditor's ability to appropriately staff the potential engagement.
Question 5
Which of the following statements is correct about an auditor's required communication
with those charged with governance?
a. The auditor should not communicate frequently recurring misstatements unless they are
material.
b. Any matters communicated to those charged with governance also are required to be
communicated to the entity's management.
c. Disagreements with management about the application of accounting principles must be
communicated in writing to those charged with governance.
d. The auditor is required to inform those charged with governance about significant
misstatements discovered by the auditor and subsequently corrected by management.
CORRECT ANSWER
3
, d. The auditor is required to inform those charged with governance about significant
misstatements discovered by the auditor and subsequently corrected by management.
Question 6
Which of the following items are included in the auditor's communication to those
charged with governance and in management's representation letter to the auditor?
I. The auditor's responsibility under generally accepted auditing standards.
II. Management's responsibility for fair presentation of the financial statements in
conformity with generally accepted accounting principles.
III. Uncorrected, nontrivial misstatements identified by the auditor.
Auditor's Comm. to Governance vs. Mgmt Rep Letter
a. I & III only vs. II & III only
b. I only vs. II only
c. I, II, & III vs. I & II only
d. I & II only vs. I, II, & III
CORRECT ANSWER
a. I & III only vs. II & III only
Question 7
U.S. GAAS do NOT require a written communication to those charged with governance to
include:
a. The adequacy of the financial statement disclosures.
b. An overview of the planned scope and timing of the audit.
4
