Uniform Certified Public Accountant (CPA)
Examination – Auditing and Attestation
(AUD) (AGACNP-C) Practice Exam 2026
|250 Most Tested Questions Collection &
Verified Detailed Answers | Tutor Verified
Success Exam) Graded A+
Ethics, Independence, and Professional Responsibilities
1. Which organization establishes auditing standards for audits of
nonissuers in the United States?
A. PCAOB
B. SEC
C. AICPA Auditing Standards Board
D. FASB
Answer: C. AICPA Auditing Standards Board
The AICPA Auditing Standards Board establishes generally accepted
auditing standards for nonissuer entities.
2. The primary purpose of an independent audit is to:
A. Detect every instance of fraud
B. Provide reasonable assurance that financial statements are free of
material misstatement
C. Guarantee the entity's financial success
D. Prepare the entity's financial statements
,Answer: B. Provide reasonable assurance that financial statements
are free of material misstatement
An audit provides reasonable, not absolute, assurance that the
financial statements are free of material misstatement.
3. Which of the following best describes professional skepticism?
A. Assuming management is dishonest
B. Assuming management is completely honest
C. Maintaining a questioning mind and critically evaluating audit
evidence
D. Accepting all management representations without verification
Answer: C. Maintaining a questioning mind and critically evaluating
audit evidence
Professional skepticism requires auditors to remain alert to
conditions that may indicate possible misstatement due to error or
fraud.
4. Which situation most directly creates a self-interest threat to
independence?
A. The auditor owns stock in the audit client
B. The auditor evaluates audit evidence
C. The auditor discusses audit findings with management
D. The auditor reviews prior-year working papers
Answer: A. The auditor owns stock in the audit client
Financial interests in an audit client can create a direct self-interest
threat to independence.
,5. An auditor's independence is most directly impaired when the
auditor:
A. Uses analytical procedures
B. Has a material direct financial interest in the client
C. Attends a client meeting
D. Requests confirmation of receivables
Answer: B. Has a material direct financial interest in the client
A material direct financial interest creates an unacceptable threat to
independence.
6. Which threat occurs when an auditor promotes a client's position
or interests?
A. Familiarity threat
B. Advocacy threat
C. Self-review threat
D. Undue influence threat
Answer: B. Advocacy threat
An advocacy threat occurs when an auditor promotes a client's
interests or position to the point that objectivity may be
compromised.
7. A former audit partner joins the audit client as its CFO. Which
threat is most relevant?
A. Familiarity
B. Advocacy
C. Self-interest
D. Self-review
Answer: D. Self-review
, The auditor may be required to evaluate decisions or work previously
performed by the auditor, creating a self-review threat.
8. Which principle requires an auditor to avoid conflicts of interest
and remain objective?
A. Integrity
B. Objectivity
C. Confidentiality
D. Due care
Answer: B. Objectivity
Objectivity requires auditors to maintain impartiality and avoid
conflicts of interest.
9. An auditor discovers confidential client information. The auditor
generally should:
A. Publish it if it is interesting
B. Disclose it to competitors
C. Maintain confidentiality unless disclosure is authorized or legally
required
D. Post it anonymously online
Answer: C. Maintain confidentiality unless disclosure is authorized
or legally required
Professional responsibilities generally require auditors to protect
confidential client information.
10. Which statement best describes due professional care?
A. Performing only procedures specifically requested by
management
Examination – Auditing and Attestation
(AUD) (AGACNP-C) Practice Exam 2026
|250 Most Tested Questions Collection &
Verified Detailed Answers | Tutor Verified
Success Exam) Graded A+
Ethics, Independence, and Professional Responsibilities
1. Which organization establishes auditing standards for audits of
nonissuers in the United States?
A. PCAOB
B. SEC
C. AICPA Auditing Standards Board
D. FASB
Answer: C. AICPA Auditing Standards Board
The AICPA Auditing Standards Board establishes generally accepted
auditing standards for nonissuer entities.
2. The primary purpose of an independent audit is to:
A. Detect every instance of fraud
B. Provide reasonable assurance that financial statements are free of
material misstatement
C. Guarantee the entity's financial success
D. Prepare the entity's financial statements
,Answer: B. Provide reasonable assurance that financial statements
are free of material misstatement
An audit provides reasonable, not absolute, assurance that the
financial statements are free of material misstatement.
3. Which of the following best describes professional skepticism?
A. Assuming management is dishonest
B. Assuming management is completely honest
C. Maintaining a questioning mind and critically evaluating audit
evidence
D. Accepting all management representations without verification
Answer: C. Maintaining a questioning mind and critically evaluating
audit evidence
Professional skepticism requires auditors to remain alert to
conditions that may indicate possible misstatement due to error or
fraud.
4. Which situation most directly creates a self-interest threat to
independence?
A. The auditor owns stock in the audit client
B. The auditor evaluates audit evidence
C. The auditor discusses audit findings with management
D. The auditor reviews prior-year working papers
Answer: A. The auditor owns stock in the audit client
Financial interests in an audit client can create a direct self-interest
threat to independence.
,5. An auditor's independence is most directly impaired when the
auditor:
A. Uses analytical procedures
B. Has a material direct financial interest in the client
C. Attends a client meeting
D. Requests confirmation of receivables
Answer: B. Has a material direct financial interest in the client
A material direct financial interest creates an unacceptable threat to
independence.
6. Which threat occurs when an auditor promotes a client's position
or interests?
A. Familiarity threat
B. Advocacy threat
C. Self-review threat
D. Undue influence threat
Answer: B. Advocacy threat
An advocacy threat occurs when an auditor promotes a client's
interests or position to the point that objectivity may be
compromised.
7. A former audit partner joins the audit client as its CFO. Which
threat is most relevant?
A. Familiarity
B. Advocacy
C. Self-interest
D. Self-review
Answer: D. Self-review
, The auditor may be required to evaluate decisions or work previously
performed by the auditor, creating a self-review threat.
8. Which principle requires an auditor to avoid conflicts of interest
and remain objective?
A. Integrity
B. Objectivity
C. Confidentiality
D. Due care
Answer: B. Objectivity
Objectivity requires auditors to maintain impartiality and avoid
conflicts of interest.
9. An auditor discovers confidential client information. The auditor
generally should:
A. Publish it if it is interesting
B. Disclose it to competitors
C. Maintain confidentiality unless disclosure is authorized or legally
required
D. Post it anonymously online
Answer: C. Maintain confidentiality unless disclosure is authorized
or legally required
Professional responsibilities generally require auditors to protect
confidential client information.
10. Which statement best describes due professional care?
A. Performing only procedures specifically requested by
management
