CPA EXAM AUD QUESTIONS & CORRECT
ANSWERS LATEST UPDATE 2024/2025 100%
CORRECT
Each of the following is a required characteristic of a review engagement of
management's discussion and analysis (MD&A), EXCEPT:
A) It consists principally of applying tests of details through inspection, observation, and
confirmation.
B) The practitioner applies analytical procedures.
C) An objective is to report if any information came to the practitioner's attention that
the MD&A is NOT reasonably presented.
D) The practitioner makes inquiries of individuals responsible for financial matters
Ans>> A) It consists principally of applying tests of details through inspection,
observation, and confirmation.
Banister, a CPA, is approached by Wagner, a client. Wagner requests that Banister
return the records provided to Banister by Wagner during an audit. Wagner still owes
Banister the fees associated with the audit. According to the AICPA Code of Professional
Conduct, what should Banister do?
1
,A) Banister should return the records to Wagner.
B) Banister should return the records to Wagner only after the fee has been paid.
C) Banister should NOT return the records to Wagner because the records now belong
to Banister.
D) Banister should NOT return the records to Wagner without a court order.
Ans>> A) Banister should return the records to Wagner.
An accountant's working papers for an engagement to review the financial statements of
a nonpublic entity would be LEAST likely to include which of the following forms of
documentation?
A) Study and evaluation of internal control.
B) Explanation of analytical procedures performed.
C) A copy of the engagement letter.
D) Copies of representation letters from client management.
2
, Ans>> A) Study and evaluation of internal control.
If differences of opinion arise between the engagement partner and the engagement
quality control reviewer, then the engagement partner should:
A) Follow the firm's policies and procedures for resolving differences of opinion.
B) Issue a disclaimer of opinion and report the issue to the entity's audit committee.
C) Discuss the differences of opinion with the entity's management and issue a modified
auditor's report.
D) Withdraw from the engagement when permissible under law or regulation.
Ans>> A) Follow the firm's policies and procedures for resolving differences of opinion.
An accountant is reviewing the financial statements of a nonpublic entity in accordance
with Statements on Standards for Accounting and Review Services (SSARS). The
accountant most likely would perform which of the following procedures?
A) Obtain an understanding of the internal control structure.
3
ANSWERS LATEST UPDATE 2024/2025 100%
CORRECT
Each of the following is a required characteristic of a review engagement of
management's discussion and analysis (MD&A), EXCEPT:
A) It consists principally of applying tests of details through inspection, observation, and
confirmation.
B) The practitioner applies analytical procedures.
C) An objective is to report if any information came to the practitioner's attention that
the MD&A is NOT reasonably presented.
D) The practitioner makes inquiries of individuals responsible for financial matters
Ans>> A) It consists principally of applying tests of details through inspection,
observation, and confirmation.
Banister, a CPA, is approached by Wagner, a client. Wagner requests that Banister
return the records provided to Banister by Wagner during an audit. Wagner still owes
Banister the fees associated with the audit. According to the AICPA Code of Professional
Conduct, what should Banister do?
1
,A) Banister should return the records to Wagner.
B) Banister should return the records to Wagner only after the fee has been paid.
C) Banister should NOT return the records to Wagner because the records now belong
to Banister.
D) Banister should NOT return the records to Wagner without a court order.
Ans>> A) Banister should return the records to Wagner.
An accountant's working papers for an engagement to review the financial statements of
a nonpublic entity would be LEAST likely to include which of the following forms of
documentation?
A) Study and evaluation of internal control.
B) Explanation of analytical procedures performed.
C) A copy of the engagement letter.
D) Copies of representation letters from client management.
2
, Ans>> A) Study and evaluation of internal control.
If differences of opinion arise between the engagement partner and the engagement
quality control reviewer, then the engagement partner should:
A) Follow the firm's policies and procedures for resolving differences of opinion.
B) Issue a disclaimer of opinion and report the issue to the entity's audit committee.
C) Discuss the differences of opinion with the entity's management and issue a modified
auditor's report.
D) Withdraw from the engagement when permissible under law or regulation.
Ans>> A) Follow the firm's policies and procedures for resolving differences of opinion.
An accountant is reviewing the financial statements of a nonpublic entity in accordance
with Statements on Standards for Accounting and Review Services (SSARS). The
accountant most likely would perform which of the following procedures?
A) Obtain an understanding of the internal control structure.
3
