CPA Exam: Auditing and Attestation
UPDATED Exam Questions and
CORRECT Answers
A CPA firm's quality control procedures pertaining to the acceptance of a prospective audit
client would most likely include - Correct Answer- Consideration 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 - Correct Answer-
Expanded 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? - Correct Answer- Compilation 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 - Correct Answer- Maintain
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? - Correct
Answer- Reviewing 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? - Correct Answer- Perform 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? - Correct Answer- The nature of the assertion tested.
UPDATED Exam Questions and
CORRECT Answers
A CPA firm's quality control procedures pertaining to the acceptance of a prospective audit
client would most likely include - Correct Answer- Consideration 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 - Correct Answer-
Expanded 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? - Correct Answer- Compilation 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 - Correct Answer- Maintain
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? - Correct
Answer- Reviewing 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? - Correct Answer- Perform 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? - Correct Answer- The nature of the assertion tested.
