Auditing Exam Study Guide | GAAP Financial Statements, Auditor
Responsibilities, PCAOB ASB Standards, Sarbanes-Oxley Compliance,
Audit Risk, Inherent Control Detection Risks, Material Misstatement,
Big Four Firms, National and Regional CPA Firms, Audit Evidence
Sufficiency Appropriateness, Working Papers, Engagement Letters,
Fraud Risk Assessment, Professional Skepticism, Analytical
Procedures, Vouching Tracing Reperformance, Inspection Observation
Inquiry Confirmation, Performance Materiality, SQUAD Audit Reports,
Code of Professional Conduct, Independence Threats, Covered
Members, Immediate and Close Family, Audit Procedures, Substantive
Testing, Internal Control Evaluation, Financial Reporting Framework,
Risk-Based Planning, Materiality Determination, Fraud Triangle,
Auditor Judgment and Opinion Exam Questions Verified and Provided
with Complete A+ Graded Rationales Latest Updated 2026
What is auditing?
A systematic process of objectively obtaining and evaluating evidence regarding assertions
about economic actions and events to ascertain the degree of correspondence between those
assertions and established criteria and communicating the results to interested users.
Who are the Big Four?
Deloitte, EY, KPMG, and PwC
,Who are the national firms/second tier firms?
Grant Thornton, BDO, McGladrey, and Crowe Horwath
Who are the regional firms?
Cherry Bekaert, Cohn Reznick, Dixon Hughes Goodman, and Elliot Davis
Who are the local firms (WNC)?
Carter PC, Goldsmith Molis & Gray, Gould Killian CPA Group, Johnson Price Sprinkle, and Ray
Bumgarner Kingshill
Major private sector organization?
AICPA
What does the Auditing Standards Board (ASB) do?
Issues the Statements on Auditing Standards (SASs)
Major public sector organization?
PCAOB
, What was established by the Sarbanes-Oxley Act of 2002?
The PCAOB
What is purpose in the principles underlying an audit?
To express an opinion on the financial statements.
What is the premise in the principles underlying an audit?
Management has responsibility is to prepare the financial statements and to provide the auditor
with information necessary to conduct the audit.
What is the responsibilities of the auditor in the principles underlying an audit?
Have competence and capability; comply with ethical requirements (independence and due
care).
What is the performance of the audit in the principles underlying an audit?
Sufficient appropriate audit evidence supporting reasonable (not absolute) assurance that the
financial statements are free of material misstatement whether due to fraud or error.
What is reporting in the principles underlying an audit?
Express an opinion, in the form of a written report, based on an evaluation of the audit
evidence obtained; or state that an opinion cannot be expressed.
Responsibilities, PCAOB ASB Standards, Sarbanes-Oxley Compliance,
Audit Risk, Inherent Control Detection Risks, Material Misstatement,
Big Four Firms, National and Regional CPA Firms, Audit Evidence
Sufficiency Appropriateness, Working Papers, Engagement Letters,
Fraud Risk Assessment, Professional Skepticism, Analytical
Procedures, Vouching Tracing Reperformance, Inspection Observation
Inquiry Confirmation, Performance Materiality, SQUAD Audit Reports,
Code of Professional Conduct, Independence Threats, Covered
Members, Immediate and Close Family, Audit Procedures, Substantive
Testing, Internal Control Evaluation, Financial Reporting Framework,
Risk-Based Planning, Materiality Determination, Fraud Triangle,
Auditor Judgment and Opinion Exam Questions Verified and Provided
with Complete A+ Graded Rationales Latest Updated 2026
What is auditing?
A systematic process of objectively obtaining and evaluating evidence regarding assertions
about economic actions and events to ascertain the degree of correspondence between those
assertions and established criteria and communicating the results to interested users.
Who are the Big Four?
Deloitte, EY, KPMG, and PwC
,Who are the national firms/second tier firms?
Grant Thornton, BDO, McGladrey, and Crowe Horwath
Who are the regional firms?
Cherry Bekaert, Cohn Reznick, Dixon Hughes Goodman, and Elliot Davis
Who are the local firms (WNC)?
Carter PC, Goldsmith Molis & Gray, Gould Killian CPA Group, Johnson Price Sprinkle, and Ray
Bumgarner Kingshill
Major private sector organization?
AICPA
What does the Auditing Standards Board (ASB) do?
Issues the Statements on Auditing Standards (SASs)
Major public sector organization?
PCAOB
, What was established by the Sarbanes-Oxley Act of 2002?
The PCAOB
What is purpose in the principles underlying an audit?
To express an opinion on the financial statements.
What is the premise in the principles underlying an audit?
Management has responsibility is to prepare the financial statements and to provide the auditor
with information necessary to conduct the audit.
What is the responsibilities of the auditor in the principles underlying an audit?
Have competence and capability; comply with ethical requirements (independence and due
care).
What is the performance of the audit in the principles underlying an audit?
Sufficient appropriate audit evidence supporting reasonable (not absolute) assurance that the
financial statements are free of material misstatement whether due to fraud or error.
What is reporting in the principles underlying an audit?
Express an opinion, in the form of a written report, based on an evaluation of the audit
evidence obtained; or state that an opinion cannot be expressed.
