2025 CPA AUDIT Exam Questions & Verified Answers Auditing & Attestation
Ethics, Evidence, Internal Controls AICPA Blueprint Becker-Based Graded A+
the |primary |objective |of |an |auditor |when |considering |the |acceptance |of |an |initial |audit |engagement |
of |a |nonissuer |is |to:
a) |establish |whether |the |preconditions |for |an |audit |are |present
b) |agree |w |mgt |on |timing |the |tests |at |interim
c) |limit |the |auditor's |responsibility |if |mgt |fails |to |provide |written |representations
d) |specify |the |degree |to |which |mgt |intends |to |rely |on |the |auditor's |testing |of |internal |ctrls |- |
answersestablish |whether |the |preconditions |for |an |audit |are |present
an |auditor |is |testing |a |client's |pension |benefit |obligation. |which |of |the |following |types |of |evidence |
would |be |most |appropriate |for |determining |that |the |financial |statement |balance |is |fairly |stated?
a) |client |prepared |schedule |showing |accounting |entries |made |to |the |GL |balance
b) |an |actuarial |valuation |obtained |by |an |outside |firm
c) |confirmation |of |pmts |received |by |the |retirees
d) |analytical |procedures |that |compare |last |year's |balance |to |this |year's |balance |- |answersan |actuarial |
valuation |obtained |by |an |outside |firm |because |it |calculates |fair |value |of |the |obligation
which |of |the |following |would |provide |an |auditor |of |a |nonissuer |with |the |best |evidence |of |fair |value |
pertaining |to |a |client's |investments |in |derivative |instruments |that |are |listed |on |a |national |exchange |
and |disclosed |at |fair |value?
a) |client's |personnel |who |trade |the |derivative
b) |quoted |market |prices
c) |docs |related |to |the |original |purchase |of |the |derivative |
d) |estimates |of |fair |value |provided |by |broker |dealers |- |answersquoted |market |prices |since |it |is |on |a |
national |exchange
which |of |the |following |qualitative |factors |would |an |auditor |consider |most |relevant |to |the |
consideration |of |whether |a |discovered |misstatement |is |material?
a) |audit |team |found |a |mistmt |that |if |recorded |affects |the |client's |compliance |with |loan |covenants
b) |audit |team |found |one |mistmt |due |to |an |error
c) |audit |team |found |a |miscalculation |in |the |client's |tax |filing |that |does |not |affect |the |client's |current |
FS |but |has |the |effect |of |increasing |its |tax |liability |in |the |future
, d) |the |co |recently |emerged |from |bankruptcy |after |receiving |addtl |bank |financing |- |answersA |is |correct
|because |if |the |mistmt |was |recorded |it |affects |the |client's |compliance |with |loan |convenants
if, |while |performing |a |review |engagement, |an |accountant |has |reason |to |believe |that |a |material |
misappropriation |of |assets |might |have |occurred, |what |should |the |accountant |do?
a) |assess |whether |controls |are |in |place |to |deter |similar |misappropriations
b) |require |an |investigation |to |determine |whether |the |misappropriation |actually |occurred
c) |disclose |the |potential |misappropriation |as |supplementary |info |in |the |accountant's |report
d) |document |communications |with |senior |mgt |about |the |matter |- |answersD |is |correct
in |the |integrated |audit |of |an |issuer, |an |auditor |has |identified |entity- |level |controls |that |are |important |
to |the |conclusion |as |to |whether |the |company |has |effective |internal |control |over |financial |reporting. |
each |of |the |following |is |an |example |of |an |entity- |level |control, |except:
a) |controls |over |the |period |end |financial |reporting |process
b) |co's |risk |assessment |process
c) |controls |over |the |completeness |of |deposited |cash
d) |controls |over |mgt |override |- |answerscontrols |over |the |completeness |of |deposited |cash |relates |to |
controls |at |the |account |level
which |of |the |following |is |a |complete |and |accurate |list |of |the |walkthrough |procedures |usually |
performed |in |an |issuer's |integrated |audit?
a) |inquiry, |observation, |analytical |procedures, |TOC
b) |inquiry, |sampling, |analytical |procedures, |TOC
c) |inquiry, |observation, |inspection |of |relevant |documentation, |and |reperformance |of |controls
d) |inquiry, |inspection |of |relevant |documentation, |sampling, |and |reperformance |of |controls |- |
answersinquiry, |observation, |inspection |of |relevant |documentation, |and |reperformance |of |controls
an |overall |response |to |address |a |high-assessed |risk |of |material |misstatement |at |the |financial |
statement |level |of |a |nonissuer |may |include:
a) |increasing |reliance |on |results |on |internal |control |testing
b) |emphasizing |the |need |for |more |accounting |staff
c) |incorporating |addtl |predictability |into |the |selection |of |procedures
d) |providing |more |supervision |of |the |audit |team |- |answersproviding |more |supervision |of |the |audit |
team
which |of |the |following |factors |would |the |auditor |not |explicitly |consider |when |determining |sample |
size |in |an |attribute |sample |for |test |of |controls?
Ethics, Evidence, Internal Controls AICPA Blueprint Becker-Based Graded A+
the |primary |objective |of |an |auditor |when |considering |the |acceptance |of |an |initial |audit |engagement |
of |a |nonissuer |is |to:
a) |establish |whether |the |preconditions |for |an |audit |are |present
b) |agree |w |mgt |on |timing |the |tests |at |interim
c) |limit |the |auditor's |responsibility |if |mgt |fails |to |provide |written |representations
d) |specify |the |degree |to |which |mgt |intends |to |rely |on |the |auditor's |testing |of |internal |ctrls |- |
answersestablish |whether |the |preconditions |for |an |audit |are |present
an |auditor |is |testing |a |client's |pension |benefit |obligation. |which |of |the |following |types |of |evidence |
would |be |most |appropriate |for |determining |that |the |financial |statement |balance |is |fairly |stated?
a) |client |prepared |schedule |showing |accounting |entries |made |to |the |GL |balance
b) |an |actuarial |valuation |obtained |by |an |outside |firm
c) |confirmation |of |pmts |received |by |the |retirees
d) |analytical |procedures |that |compare |last |year's |balance |to |this |year's |balance |- |answersan |actuarial |
valuation |obtained |by |an |outside |firm |because |it |calculates |fair |value |of |the |obligation
which |of |the |following |would |provide |an |auditor |of |a |nonissuer |with |the |best |evidence |of |fair |value |
pertaining |to |a |client's |investments |in |derivative |instruments |that |are |listed |on |a |national |exchange |
and |disclosed |at |fair |value?
a) |client's |personnel |who |trade |the |derivative
b) |quoted |market |prices
c) |docs |related |to |the |original |purchase |of |the |derivative |
d) |estimates |of |fair |value |provided |by |broker |dealers |- |answersquoted |market |prices |since |it |is |on |a |
national |exchange
which |of |the |following |qualitative |factors |would |an |auditor |consider |most |relevant |to |the |
consideration |of |whether |a |discovered |misstatement |is |material?
a) |audit |team |found |a |mistmt |that |if |recorded |affects |the |client's |compliance |with |loan |covenants
b) |audit |team |found |one |mistmt |due |to |an |error
c) |audit |team |found |a |miscalculation |in |the |client's |tax |filing |that |does |not |affect |the |client's |current |
FS |but |has |the |effect |of |increasing |its |tax |liability |in |the |future
, d) |the |co |recently |emerged |from |bankruptcy |after |receiving |addtl |bank |financing |- |answersA |is |correct
|because |if |the |mistmt |was |recorded |it |affects |the |client's |compliance |with |loan |convenants
if, |while |performing |a |review |engagement, |an |accountant |has |reason |to |believe |that |a |material |
misappropriation |of |assets |might |have |occurred, |what |should |the |accountant |do?
a) |assess |whether |controls |are |in |place |to |deter |similar |misappropriations
b) |require |an |investigation |to |determine |whether |the |misappropriation |actually |occurred
c) |disclose |the |potential |misappropriation |as |supplementary |info |in |the |accountant's |report
d) |document |communications |with |senior |mgt |about |the |matter |- |answersD |is |correct
in |the |integrated |audit |of |an |issuer, |an |auditor |has |identified |entity- |level |controls |that |are |important |
to |the |conclusion |as |to |whether |the |company |has |effective |internal |control |over |financial |reporting. |
each |of |the |following |is |an |example |of |an |entity- |level |control, |except:
a) |controls |over |the |period |end |financial |reporting |process
b) |co's |risk |assessment |process
c) |controls |over |the |completeness |of |deposited |cash
d) |controls |over |mgt |override |- |answerscontrols |over |the |completeness |of |deposited |cash |relates |to |
controls |at |the |account |level
which |of |the |following |is |a |complete |and |accurate |list |of |the |walkthrough |procedures |usually |
performed |in |an |issuer's |integrated |audit?
a) |inquiry, |observation, |analytical |procedures, |TOC
b) |inquiry, |sampling, |analytical |procedures, |TOC
c) |inquiry, |observation, |inspection |of |relevant |documentation, |and |reperformance |of |controls
d) |inquiry, |inspection |of |relevant |documentation, |sampling, |and |reperformance |of |controls |- |
answersinquiry, |observation, |inspection |of |relevant |documentation, |and |reperformance |of |controls
an |overall |response |to |address |a |high-assessed |risk |of |material |misstatement |at |the |financial |
statement |level |of |a |nonissuer |may |include:
a) |increasing |reliance |on |results |on |internal |control |testing
b) |emphasizing |the |need |for |more |accounting |staff
c) |incorporating |addtl |predictability |into |the |selection |of |procedures
d) |providing |more |supervision |of |the |audit |team |- |answersproviding |more |supervision |of |the |audit |
team
which |of |the |following |factors |would |the |auditor |not |explicitly |consider |when |determining |sample |
size |in |an |attribute |sample |for |test |of |controls?
