CPA Exam: Auditing, Attestation,
Questions and Answers.
A CPA firm's quality control procedures pertaining to the acceptance of a prospective audit client
would most likely include - AnswerConsideration of the business reputation of the client's principal
owners, key management, related parties, and those charged with governance.
A difference of opinion concerning accounting and auditing matters relative to a particular phase of
the audit arises between an assistant auditor and the auditor responsible for the engagement. After
appropriate consultation, the assistant auditor asks to be dissociated from the resolution of the
matter. The audit documentation would probably be - AnswerExpanded to detail the assistant
auditor's position and how the difference of opinion was resolved.
Must a CPA in public practice be independent in fact and appearance when providing the following
services? - AnswerCompilation of personal Financial Statements: No, Preparation of a tax return: No,
Compilation of a financial forecast: No
An auditor strives to achieve independence in appearance to - AnswerMaintain public confidence in
the profession
According to the PCAOB, which of the following tax services may be provided jointly with the audit
of an issuer's financial statements without impairing independence? - AnswerReviewing a proposed
transaction and informing the client of the tax consequences.
In an audit of financial statements for which an auditor's assessment of risk is judgmental and may
not be sufficiently precise to identify all risks of material misstatement, the auditor should take
which of the following actions? - AnswerPerform substantive procedures for all relevant assertions
related to each material class of transactions.
The auditor should consider certain factors in assessing the efficiency and effectiveness of analytical
procedures as compared to tests of details. In determining whether and to what extent analytical
procedures should be used, which of the following should the auditor consider? - AnswerThe nature
of the assertion tested.
Manual controls would most likely be more suitable than automated controls for which of the
following? - AnswerLarge, unusual, or nonrecurring transactions.
Questions and Answers.
A CPA firm's quality control procedures pertaining to the acceptance of a prospective audit client
would most likely include - AnswerConsideration of the business reputation of the client's principal
owners, key management, related parties, and those charged with governance.
A difference of opinion concerning accounting and auditing matters relative to a particular phase of
the audit arises between an assistant auditor and the auditor responsible for the engagement. After
appropriate consultation, the assistant auditor asks to be dissociated from the resolution of the
matter. The audit documentation would probably be - AnswerExpanded to detail the assistant
auditor's position and how the difference of opinion was resolved.
Must a CPA in public practice be independent in fact and appearance when providing the following
services? - AnswerCompilation of personal Financial Statements: No, Preparation of a tax return: No,
Compilation of a financial forecast: No
An auditor strives to achieve independence in appearance to - AnswerMaintain public confidence in
the profession
According to the PCAOB, which of the following tax services may be provided jointly with the audit
of an issuer's financial statements without impairing independence? - AnswerReviewing a proposed
transaction and informing the client of the tax consequences.
In an audit of financial statements for which an auditor's assessment of risk is judgmental and may
not be sufficiently precise to identify all risks of material misstatement, the auditor should take
which of the following actions? - AnswerPerform substantive procedures for all relevant assertions
related to each material class of transactions.
The auditor should consider certain factors in assessing the efficiency and effectiveness of analytical
procedures as compared to tests of details. In determining whether and to what extent analytical
procedures should be used, which of the following should the auditor consider? - AnswerThe nature
of the assertion tested.
Manual controls would most likely be more suitable than automated controls for which of the
following? - AnswerLarge, unusual, or nonrecurring transactions.
