[CPA] Certified Public Accountant Practice Exam

Create 100 MCQ with Explanations on [CPA] Certified Public Accountant Practice Exam

Core Sections:

1. Auditing and Attestation (AUD):
o Content Areas:
▪ Ethics, Professional Responsibilities, and General Principles
▪ Assessing Risk and Developing a Planned Response
▪ Performing Further Procedures and Obtaining Evidence
▪ Forming Conclusions and Reporting
o Skills Tested:
▪ Remembering and Understanding
▪ Application
▪ Analysis
▪ Evaluation
2. Financial Accounting and Reporting (FAR):
o Content Areas:
▪ Financial Reporting
▪ Select Balance Sheet Accounts
▪ Select Transactions
o Skills Tested:
▪ Remembering and Understanding
▪ Application
▪ Analysis
3. Taxation and Regulation (REG):
o Content Areas:
▪ Ethics, Professional Responsibilities, and Federal Tax Procedures
▪ Business Law
▪ Federal Taxation of Property Transactions
▪ Federal Taxation of Individuals
▪ Federal Taxation of Entities
o Skills Tested:
▪ Remembering and Understanding
▪ Application
▪ Analysis

Discipline Sections (Choose One):

1. Business Analysis and Reporting (BAR):
o Content Areas:
▪ Business Analysis
▪ Technical Accounting and Reporting
▪ State and Local Governments
o Skills Tested:
▪ Remembering and Understanding
▪ Application

, ▪
Analysis
2. Information Systems and Controls (ISC):
o Content Areas:
▪ Information Systems and Data Management
▪ Security, Confidentiality, and Privacy
▪ Considerations for System and Organization Controls (SOC) Engagements
o Skills Tested:
▪ Remembering and Understanding
▪ Application
▪ Analysis
3. Tax Compliance and Planning (TCP):
o Content Areas:
▪ Tax Compliance and Planning for Individuals and Personal Financial
Planning
▪ Entity Tax Compliance
▪ Entity Tax Planning
▪ Property Transactions (Disposition of Assets)
o Skills Tested:
▪ Remembering and Understanding
▪ Application
▪ Analysis


Auditing and Attestation (AUD)
1. Ethics, Professional Responsibilities, and General Principles

Question 1:
Which of the following best describes the concept of "objectivity" in auditing?

A) Auditors must always agree with management's representations.
B) Auditors should maintain an unbiased mental attitude and avoid conflicts of interest.
C) Auditors are allowed to have financial interests in the client's business.
D) Auditors should rely solely on the information provided by the client.

Answer: B

Explanation:
Objectivity requires auditors to maintain an unbiased mental attitude and avoid situations that
could impair their impartiality, such as conflicts of interest.



Question 2:
Under the AICPA Code of Professional Conduct, which of the following is a fundamental
principle?

,A) Confidentiality
B) Independence
C) Competence
D) All of the above

Answer: D

Explanation:
The AICPA Code of Professional Conduct includes principles such as Integrity, Objectivity,
Professional Competence, Due Care, Confidentiality, and Professional Behavior.



2. Assessing Risk and Developing a Planned Response

Question 3:
What is the primary purpose of performing a risk assessment in an audit?

A) To eliminate all audit risks
B) To identify areas where material misstatements may occur
C) To determine the financial health of the client
D) To finalize the audit report

Answer: B

Explanation:
Risk assessment helps auditors identify areas where material misstatements might occur,
allowing them to focus their audit procedures accordingly.



Question 4:
Which type of audit risk is reduced by increasing the sample size of testing?

A) Inherent risk
B) Control risk
C) Detection risk
D) All of the above

Answer: C

Explanation:
Increasing the sample size primarily reduces detection risk, which is the risk that auditors will
not detect a material misstatement.

, 3. Performing Further Procedures and Obtaining Evidence

Question 5:
Which of the following is considered persuasive evidence in an audit?

A) Client's internal memos
B) Confirmation from a third party
C) Verbal representations by management
D) Auditor's own calculations

Answer: B

Explanation:
Third-party confirmations are considered highly persuasive evidence as they are obtained from
an independent source outside the entity.



Question 6:
Which audit procedure involves inspecting records or documents?

A) Observation
B) Inquiry
C) Inspection
D) Recalculation

Answer: C

Explanation:
Inspection involves examining records, documents, or tangible assets to gather audit evidence.



4. Forming Conclusions and Reporting

Question 7:
If an auditor concludes that the financial statements are free of material misstatements, what type
of opinion is issued?

A) Qualified Opinion
B) Adverse Opinion
C) Disclaimer of Opinion
D) Unqualified (Clean) Opinion

Answer: D