PRINCIPLES OF AUDITING AND OTHER
ASSURANCE SERVICES EXAM 2026 UPDATED
PRACTICE QUESTIONS AND SOLUTIONS
◉ When are analytical procedures required on an audit? What is the
primary purpose of analytical procedures during each phase of the
audit. Answer: Analytical procedures are required during the
completion phase, as a final review for material misstatements or
financial problems.
Analytical procedures are required during the planning phase to
assist the auditor in determining the nature, extent, and timing of
work to be performed.
◉ Begin by choosing the option that best describes what is meant by
an audit procedure.. Answer: he detailed instruction that explains
the audit evidence to be obtained during the audit.
◉ Why is it important for audit procedures to be carefully worded?.
Answer: Audit procedures must be carefully worded to make sure
the instructions are clear since these are the instructions to be
followed in accumulating evidence.
,◉ Begin by choosing the option that best describes what is meant by
an audit program for accounts receivable.. Answer: A list of audit
procedures that will be used to audit accounts receivable for a given
client.
◉ What four things should be included in an audit program?.
Answer: 1. When to perform the procedures.
2. Which audit procedures to use.
3. What sample size to select for a given procedure.
4. Which items to select from the population.
◉ Begin by identifying the two factors that determine the
persuasiveness of evidence.. Answer: Appropriateness
and sufficiency. Appropriateness refers to the relevance and
reliability ofevidence, or the degree to which evidence can be
considered believable or worthy of trust. Sufficiency refers to the
quantity of evidence.
◉ How are these two factors related to audit procedures, sample
size, items to select, and timing?. Answer: Appropriateness relates to
the audit procedures selected, including the timing of when those
procedures are performed. Sufficiency is related to sample size and
items to select.
,◉ The characteristics of a confirmation are. Answer: 1. From
independent third party
2. Requested by the auditor
3. Receipt, directly by auditor
4. Written or electronic response
◉ Distinguish between a confirmation and external documentation..
Answer: A confirmation is prepared specifically
for the auditor and comes from an external source. External
documentation
is in the hands of the client at the time of the audit and was prepared
for the client's use in the day-to-day operation of the business.
◉ Identify three examples of internal documentation.. Answer: 1.
Receiving report
2. Payroll time card
3. Check
request form
◉ Identify three examples of external documentation.. Answer: 1.
Validated deposit slip
2. Vendor's invoice
3. Cancelled check
, ◉ Identify the most important reasons for performing analytical
procedures. Answer: 1. Indication of the presence of possible
misstatements in the financial statements.
2.Assessment of the entity's ability to continue as a going concern.
3. Reduction of detailed audit tests
4. Understanding the client's business and industry .
◉ What is the primary purpose of analytical procedures performed
during the completion phase of the audit?. Answer: Analytical
procedures performed during the completion phase serve as a final
review for material misstatements or financial problems.
◉ Begin by selecting who owns the audit files.. Answer: Audit files
are owned by the auditor.
◉ When can the audit files be used by other people?. Answer: 1.
They can be released to another CPA firm without the client's
permission if they are being reviewed as a part of a voluntary peer
review program under AICPA, state CPA society, or state Board of
Accountancy authorization.
2. The audit files can be sold or released to other users if the auditor
obtains permission from the client.
3. The audit files can be subpoenaed by a court and thereby become
the property of the court.
ASSURANCE SERVICES EXAM 2026 UPDATED
PRACTICE QUESTIONS AND SOLUTIONS
◉ When are analytical procedures required on an audit? What is the
primary purpose of analytical procedures during each phase of the
audit. Answer: Analytical procedures are required during the
completion phase, as a final review for material misstatements or
financial problems.
Analytical procedures are required during the planning phase to
assist the auditor in determining the nature, extent, and timing of
work to be performed.
◉ Begin by choosing the option that best describes what is meant by
an audit procedure.. Answer: he detailed instruction that explains
the audit evidence to be obtained during the audit.
◉ Why is it important for audit procedures to be carefully worded?.
Answer: Audit procedures must be carefully worded to make sure
the instructions are clear since these are the instructions to be
followed in accumulating evidence.
,◉ Begin by choosing the option that best describes what is meant by
an audit program for accounts receivable.. Answer: A list of audit
procedures that will be used to audit accounts receivable for a given
client.
◉ What four things should be included in an audit program?.
Answer: 1. When to perform the procedures.
2. Which audit procedures to use.
3. What sample size to select for a given procedure.
4. Which items to select from the population.
◉ Begin by identifying the two factors that determine the
persuasiveness of evidence.. Answer: Appropriateness
and sufficiency. Appropriateness refers to the relevance and
reliability ofevidence, or the degree to which evidence can be
considered believable or worthy of trust. Sufficiency refers to the
quantity of evidence.
◉ How are these two factors related to audit procedures, sample
size, items to select, and timing?. Answer: Appropriateness relates to
the audit procedures selected, including the timing of when those
procedures are performed. Sufficiency is related to sample size and
items to select.
,◉ The characteristics of a confirmation are. Answer: 1. From
independent third party
2. Requested by the auditor
3. Receipt, directly by auditor
4. Written or electronic response
◉ Distinguish between a confirmation and external documentation..
Answer: A confirmation is prepared specifically
for the auditor and comes from an external source. External
documentation
is in the hands of the client at the time of the audit and was prepared
for the client's use in the day-to-day operation of the business.
◉ Identify three examples of internal documentation.. Answer: 1.
Receiving report
2. Payroll time card
3. Check
request form
◉ Identify three examples of external documentation.. Answer: 1.
Validated deposit slip
2. Vendor's invoice
3. Cancelled check
, ◉ Identify the most important reasons for performing analytical
procedures. Answer: 1. Indication of the presence of possible
misstatements in the financial statements.
2.Assessment of the entity's ability to continue as a going concern.
3. Reduction of detailed audit tests
4. Understanding the client's business and industry .
◉ What is the primary purpose of analytical procedures performed
during the completion phase of the audit?. Answer: Analytical
procedures performed during the completion phase serve as a final
review for material misstatements or financial problems.
◉ Begin by selecting who owns the audit files.. Answer: Audit files
are owned by the auditor.
◉ When can the audit files be used by other people?. Answer: 1.
They can be released to another CPA firm without the client's
permission if they are being reviewed as a part of a voluntary peer
review program under AICPA, state CPA society, or state Board of
Accountancy authorization.
2. The audit files can be sold or released to other users if the auditor
obtains permission from the client.
3. The audit files can be subpoenaed by a court and thereby become
the property of the court.
