2025 AUD CPA Exam Summary Notes Complete Audit & Attestation Review
Ethics, Risk, Evidence, Reports Becker-Aligned AICPA Blueprint Graded A+
SU |1 |- |answersEngagement |Responsibilities
Nature |of |an |Attest |Engagement |- |answersGives |an |assertion |or |opinion |on |the |material |of |the |
responsible |party. |They |only |apply |to |a |CPA |operating |in |public |practice. |Some |services |require |a |CPA |
to |disclaim |assurance.
Attestation |Standards |- |answersGeneral |Standards |(training, |proficiency, |knowledge). |Should |be |
measurable. |CPA |must |maintain |independence.
Field |Work |Standards |(planning |and |supervision |& |sufficient |appropriate |evidence)
Reporting |Standards |(Character |of |Engagement, |conclusion, |reservations, |restrictions)
Acronym: |TIPSC |PE |CCRR
Generally |Accepted |Auditing |Standards |and |the |International |Auditing |Standards |- |answersThe |
General |Standards |were |codified |between |GAAS |and |the |AICPA's |ASB. |They |basically |converge |with |
international |standards |but |still |differ |in |some |areas.
Who |regulates |issuers |versus |non-issuer |audits? |- |answersIssuers |Audit |= |PCAOB, |Non-issuer |= |ASB |
Standards
Who |issues |Government |Audit |Standards? |- |answersThe |yellowbook |is |the |government |standards |and
|is |issued |by |the |Governmental |Accountability |Office. |It |is |ASB |unless |modified. |Federal |Awards |may |
require |a |single |audit |which |falls |under |the |OMB |Single |Audit |Act.
Purpose |of |an |Audit |- |answersTo |provide |financial |statement |users |with |an |opinion |on |whether |the |
financial |statements |are |presented |fairly |in |accordance |with |the |applicable |financial |reporting |
framework |and |free |from |material |misstatement |whether |due |to |fraud |or |error.
Professional |Skepticism |- |answersRequired |by |auditors |when |performing |an |audit.
Audit |Risk |- |answersThe |risk |that |an |audit |will |not |detect |a |material |misstatement. |There |will |always |
be |audit |risk, |but |the |goal |is |to |get |that |risk |as |close |to |zero |as |possible.
Managements |Assertions |- |answersCAVE |CROC
Completeness
Accuracy
Valuation |and |Allocation
Existence
,Cutoff
Rights |and |Obligations
Occurrence
Classification |and |Understandability
Assertions |about |Transactions |and |Events |(P&L |and |Cash |Flows) |- |answersOccurrence, |Completeness, |
Accuracy, |Cutoff, |Classification
Assertions |about |Account |Balances |(B/S) |- |answersExistence, |Rights |and |Obligations, |Completeness, |
Valuation |and |Allocation
Assertions |about |Presentation |and |Disclosure |(Mainly |notes |to |financial |statements) |- |
answersOccurrence |and |Rights |and |Obligations, |Completeness, |Classification |and |Understandability, |
Accuracy |and |Valuation
PCAOB |Assertions |- |answersSame |as |above |but |they |do |not |explicitly |address |accuracy.
Professional |Responsibilities |of |Auditors |- |answersMust |comply |with |unconditional |requirements |(i.e. |
independence).
Additional |Professional |Services |- |answersPreparation |(Non-attest), |Compilation |(Non-attest |but |must |
be |independent), |Review |(Limited |assurance, |performed |by |inquiry |and |analytical |procedure), |agreed |
upon |procedures |(attest, |must |be |independent), |Prospective |Financial |Statements, |Examinations |of |
Internal |Control |over |Financial |Reporting
Assurance |Services |- |answersAssurance |> |Attest |> |Audit
Does |not |include |consulting |services
Designed |to |enhance |decision |making
Quality |Control |- |answersStarts |with |Tone |of |the |Top, |ethical |requirements, |and |other |procedures. |
SOX |requires |a |second |auditor |to |sign |off |on |audits. |CEO |and |CFO |must |sign |off |on |financial |
statements.
SU |2 |- |answersProfessional |Responsibilities
Code |of |Professional |Conduct |- |Principles |- |answersResponsibilities, |Protect |public |interest, |act |with |
integrity, |be |objective |and |independent, |act |with |due |professional |care, |follow |the |scope |and |nature |
of |services
Code |of |Professional |Conduct |- |Rules |- |answersFall |under |the |principles, |more |specific.
Independence |- |answersMust |be |independence |in |mind |and |in |appearance. |
Independence |is |impaired |if |a |COVERED |members |has |certain |interests |or |relationships: |Covered |= |
attest |member, |partner |or |manager |who |provides |non-attest |services, |partner |in |office |where |lead |
engagement |partner |practices.
, Conceptual |Framework |for |Independence |- |answersIdentify |threats |to |independence, |use |safeguards |
to |minimize |them |to |acceptable |level.
How |is |independence |impaired? |- |answersIf |a |covered |member |has |a |direct |financial |interest |in |an |
attest |client |during |engagement.
Covered |member |has |loans |to |or |from |an |attest |client |during |engagement.
Covered |member |has |indirect |material |financial |interest.
Covered |member |is |a |executor |of |trust.
Covered |member |owns |5% |or |more |of |an |attest |client |during |period |or |engagement.
Immediate |family |of |a |covered |member |is |subject |to |independence |rules.
Close |relatives |can |result |in |impairment |but |are |less |strict |than |immediate.
May |be |impaired |by |actual |or |threatened |litigation.
What |services |impair |independence? |- |answersCovered |member |should |not |assume |management |
responsibilities. |
Expert |witness |services, |managing |internal |audit, |tax |advocacy |services, |appraisals |all |impair |
independence. |
NOT |impaired |by |preparing |taxes, |business |risk |consulting, |advisory |services.
NOT |impaired |for |non-issuer |bookkeeping, |payroll |processing.
Integrity |and |Objectivity |- |answersMust |be |objective |and |act |with |integrity |and |be |free |from |conflicts |
of |interest, |not |knowingly |misrepresent |facts, |and |not |subordinate |his |or |her |judgment.
Can |conflicts |of |interest |be |permitted? |- |answersYes, |if |disclosed, |and |consent |is |obtained |from |
appropriate |parties. |This |does |not |apply |to |independence. |
Ex. |Performing |litigation |for |plaintiff |when |the |defendant |is |a |client.
General |Standards |- |answersProfessional |Competence, |due |professional |care, |plan |and |supervise, |
sufficient |relevant |data.
You |are |allowed |to |do |research |to |ensure |competence.
Accounting |Principles |Rule |- |answersAny |material |departure |from |an |accounting |principle |issued |by |
an |AICPA |designated |standards |prevents |a |member |rom |expressing |an |opinion |in |the |affirmative |or |
stating |that |he/she |is |unaware |of |material |modifications.
Commissions |and |Referral |Fees |Rule |- |answersCannot |get |referrals |or |commissions |for |clients |that |
you |are |performing |an |audit.
SOX |Professional |Responsibilities |- |answersMust |disclose |fees |in |proxy |statement. |
Mandatory |auditor |rotation.
Ethics, Risk, Evidence, Reports Becker-Aligned AICPA Blueprint Graded A+
SU |1 |- |answersEngagement |Responsibilities
Nature |of |an |Attest |Engagement |- |answersGives |an |assertion |or |opinion |on |the |material |of |the |
responsible |party. |They |only |apply |to |a |CPA |operating |in |public |practice. |Some |services |require |a |CPA |
to |disclaim |assurance.
Attestation |Standards |- |answersGeneral |Standards |(training, |proficiency, |knowledge). |Should |be |
measurable. |CPA |must |maintain |independence.
Field |Work |Standards |(planning |and |supervision |& |sufficient |appropriate |evidence)
Reporting |Standards |(Character |of |Engagement, |conclusion, |reservations, |restrictions)
Acronym: |TIPSC |PE |CCRR
Generally |Accepted |Auditing |Standards |and |the |International |Auditing |Standards |- |answersThe |
General |Standards |were |codified |between |GAAS |and |the |AICPA's |ASB. |They |basically |converge |with |
international |standards |but |still |differ |in |some |areas.
Who |regulates |issuers |versus |non-issuer |audits? |- |answersIssuers |Audit |= |PCAOB, |Non-issuer |= |ASB |
Standards
Who |issues |Government |Audit |Standards? |- |answersThe |yellowbook |is |the |government |standards |and
|is |issued |by |the |Governmental |Accountability |Office. |It |is |ASB |unless |modified. |Federal |Awards |may |
require |a |single |audit |which |falls |under |the |OMB |Single |Audit |Act.
Purpose |of |an |Audit |- |answersTo |provide |financial |statement |users |with |an |opinion |on |whether |the |
financial |statements |are |presented |fairly |in |accordance |with |the |applicable |financial |reporting |
framework |and |free |from |material |misstatement |whether |due |to |fraud |or |error.
Professional |Skepticism |- |answersRequired |by |auditors |when |performing |an |audit.
Audit |Risk |- |answersThe |risk |that |an |audit |will |not |detect |a |material |misstatement. |There |will |always |
be |audit |risk, |but |the |goal |is |to |get |that |risk |as |close |to |zero |as |possible.
Managements |Assertions |- |answersCAVE |CROC
Completeness
Accuracy
Valuation |and |Allocation
Existence
,Cutoff
Rights |and |Obligations
Occurrence
Classification |and |Understandability
Assertions |about |Transactions |and |Events |(P&L |and |Cash |Flows) |- |answersOccurrence, |Completeness, |
Accuracy, |Cutoff, |Classification
Assertions |about |Account |Balances |(B/S) |- |answersExistence, |Rights |and |Obligations, |Completeness, |
Valuation |and |Allocation
Assertions |about |Presentation |and |Disclosure |(Mainly |notes |to |financial |statements) |- |
answersOccurrence |and |Rights |and |Obligations, |Completeness, |Classification |and |Understandability, |
Accuracy |and |Valuation
PCAOB |Assertions |- |answersSame |as |above |but |they |do |not |explicitly |address |accuracy.
Professional |Responsibilities |of |Auditors |- |answersMust |comply |with |unconditional |requirements |(i.e. |
independence).
Additional |Professional |Services |- |answersPreparation |(Non-attest), |Compilation |(Non-attest |but |must |
be |independent), |Review |(Limited |assurance, |performed |by |inquiry |and |analytical |procedure), |agreed |
upon |procedures |(attest, |must |be |independent), |Prospective |Financial |Statements, |Examinations |of |
Internal |Control |over |Financial |Reporting
Assurance |Services |- |answersAssurance |> |Attest |> |Audit
Does |not |include |consulting |services
Designed |to |enhance |decision |making
Quality |Control |- |answersStarts |with |Tone |of |the |Top, |ethical |requirements, |and |other |procedures. |
SOX |requires |a |second |auditor |to |sign |off |on |audits. |CEO |and |CFO |must |sign |off |on |financial |
statements.
SU |2 |- |answersProfessional |Responsibilities
Code |of |Professional |Conduct |- |Principles |- |answersResponsibilities, |Protect |public |interest, |act |with |
integrity, |be |objective |and |independent, |act |with |due |professional |care, |follow |the |scope |and |nature |
of |services
Code |of |Professional |Conduct |- |Rules |- |answersFall |under |the |principles, |more |specific.
Independence |- |answersMust |be |independence |in |mind |and |in |appearance. |
Independence |is |impaired |if |a |COVERED |members |has |certain |interests |or |relationships: |Covered |= |
attest |member, |partner |or |manager |who |provides |non-attest |services, |partner |in |office |where |lead |
engagement |partner |practices.
, Conceptual |Framework |for |Independence |- |answersIdentify |threats |to |independence, |use |safeguards |
to |minimize |them |to |acceptable |level.
How |is |independence |impaired? |- |answersIf |a |covered |member |has |a |direct |financial |interest |in |an |
attest |client |during |engagement.
Covered |member |has |loans |to |or |from |an |attest |client |during |engagement.
Covered |member |has |indirect |material |financial |interest.
Covered |member |is |a |executor |of |trust.
Covered |member |owns |5% |or |more |of |an |attest |client |during |period |or |engagement.
Immediate |family |of |a |covered |member |is |subject |to |independence |rules.
Close |relatives |can |result |in |impairment |but |are |less |strict |than |immediate.
May |be |impaired |by |actual |or |threatened |litigation.
What |services |impair |independence? |- |answersCovered |member |should |not |assume |management |
responsibilities. |
Expert |witness |services, |managing |internal |audit, |tax |advocacy |services, |appraisals |all |impair |
independence. |
NOT |impaired |by |preparing |taxes, |business |risk |consulting, |advisory |services.
NOT |impaired |for |non-issuer |bookkeeping, |payroll |processing.
Integrity |and |Objectivity |- |answersMust |be |objective |and |act |with |integrity |and |be |free |from |conflicts |
of |interest, |not |knowingly |misrepresent |facts, |and |not |subordinate |his |or |her |judgment.
Can |conflicts |of |interest |be |permitted? |- |answersYes, |if |disclosed, |and |consent |is |obtained |from |
appropriate |parties. |This |does |not |apply |to |independence. |
Ex. |Performing |litigation |for |plaintiff |when |the |defendant |is |a |client.
General |Standards |- |answersProfessional |Competence, |due |professional |care, |plan |and |supervise, |
sufficient |relevant |data.
You |are |allowed |to |do |research |to |ensure |competence.
Accounting |Principles |Rule |- |answersAny |material |departure |from |an |accounting |principle |issued |by |
an |AICPA |designated |standards |prevents |a |member |rom |expressing |an |opinion |in |the |affirmative |or |
stating |that |he/she |is |unaware |of |material |modifications.
Commissions |and |Referral |Fees |Rule |- |answersCannot |get |referrals |or |commissions |for |clients |that |
you |are |performing |an |audit.
SOX |Professional |Responsibilities |- |answersMust |disclose |fees |in |proxy |statement. |
Mandatory |auditor |rotation.
