CPA Exam - AUD - Multiple Choice ||
100% accurate questions answers
Guarantee A+ (2025/2026)
Which of the following represents an appropriate overall response to an increase in financial
statement level risk?
a. Changing the general approach of the audit to ensure control testing of all
significant accounts.
b. Providing management with more specific details about audit sampling
procedures.
c. Shifting substantive procedures to interim.
d. Increasing the level of supervision. correct answers d. Increasing the level of
supervision.
Using a combined approach with most likely involve:
a. Changing the timing of substantive tests by omitting interim-date testing and
performing the tests at year-end.
b. Reducing inherent risk for most of the assertions relevant to significant account
balances.
,c. Identifying specific internal controls relevant to specific assertions.
d. Performing more extensive substantive tests with later sample sizes than
originally planned. correct answers c. Identifying specific internal controls relevant to
specific assertions.
Which of the following auditor concerns most likely would be so serious that the
auditor would conclude that a financial statement audit CANNOT be performed?
a. Management has imposed a restriction that the auditor believes will result in a qualified
opinion.
b. A portion of supporting evidence stored at an offsite storage facility was
destroyed by a hurricane.
c. The CPA lacks experience in the client's operations and industry.
d. There is substantial risk of management intentionally manipulating accounting records.
correct answers d. There is substantial risk of management intentionally manipulating
accounting records.
Before accepting a new client engagement, an auditor should:
a. Evaluate management's integrity through review of the management
representation letter.
b. Assess the auditor's ability to appropriately staff the potential engagement.
,c. Establish an understanding with the potential client as to a preliminary measure of
materiality.
d. Contact the predecessor auditor and arrange to review the audit files from the previous
year's audit. correct answers b. Assess the auditor's ability to
appropriately staff the potential engagement.
Which of the following statements is correct about an auditor's required
communication with those charged with governance?
a. The auditor should not communicate frequently recurring misstatements unless they are
material.
b. Any matters communicated to those charged with governance also are required to be
communicated to the entity's management.
c. Disagreements with management about the application of accounting principles must be
communicated in writing to those charged with governance.
d. The auditor is required to inform those charged with governance about significant
misstatements discovered by the auditor and subsequently corrected by management.
correct answers d. The auditor is required to inform those charged with governance about
significant misstatements discovered by the auditor and
subsequently corrected by management.
Which of the following items are included in the auditor's communication to those charged
with governance and in management's representation letter to the
auditor?
I. The auditor's responsibility under generally accepted auditing standards.
, II. Management's responsibility for fair presentation of the financial statements in
conformity with generally accepted accounting principles.
III. Uncorrected, nontrivial misstatements identified by the auditor.
Auditor's Comm. to Governance vs. Mgmt Rep Letter
a. I & III only vs. II & III only
b. I only vs. II only
c. I, II, & III vs. I & II only
d. I & II only vs. I, II, & III correct answers a. I & III only vs. II & III only
U.S. GAAS do NOT require a written communication to those charged with governance to
include:
a. The adequacy of the financial statement disclosures.
b. An overview of the planned scope and timing of the audit.
c. Disagreements with management, whether resolved or not.
d. Significant difficulties encountered in performing the audit. correct answers b. An
overview of the planned scope and timing of the audit.
* may be in writing or orally communicated.
According to professional standards, audit documentation should:
a. Include a flowchart to show the design and implementation of internal control.
100% accurate questions answers
Guarantee A+ (2025/2026)
Which of the following represents an appropriate overall response to an increase in financial
statement level risk?
a. Changing the general approach of the audit to ensure control testing of all
significant accounts.
b. Providing management with more specific details about audit sampling
procedures.
c. Shifting substantive procedures to interim.
d. Increasing the level of supervision. correct answers d. Increasing the level of
supervision.
Using a combined approach with most likely involve:
a. Changing the timing of substantive tests by omitting interim-date testing and
performing the tests at year-end.
b. Reducing inherent risk for most of the assertions relevant to significant account
balances.
,c. Identifying specific internal controls relevant to specific assertions.
d. Performing more extensive substantive tests with later sample sizes than
originally planned. correct answers c. Identifying specific internal controls relevant to
specific assertions.
Which of the following auditor concerns most likely would be so serious that the
auditor would conclude that a financial statement audit CANNOT be performed?
a. Management has imposed a restriction that the auditor believes will result in a qualified
opinion.
b. A portion of supporting evidence stored at an offsite storage facility was
destroyed by a hurricane.
c. The CPA lacks experience in the client's operations and industry.
d. There is substantial risk of management intentionally manipulating accounting records.
correct answers d. There is substantial risk of management intentionally manipulating
accounting records.
Before accepting a new client engagement, an auditor should:
a. Evaluate management's integrity through review of the management
representation letter.
b. Assess the auditor's ability to appropriately staff the potential engagement.
,c. Establish an understanding with the potential client as to a preliminary measure of
materiality.
d. Contact the predecessor auditor and arrange to review the audit files from the previous
year's audit. correct answers b. Assess the auditor's ability to
appropriately staff the potential engagement.
Which of the following statements is correct about an auditor's required
communication with those charged with governance?
a. The auditor should not communicate frequently recurring misstatements unless they are
material.
b. Any matters communicated to those charged with governance also are required to be
communicated to the entity's management.
c. Disagreements with management about the application of accounting principles must be
communicated in writing to those charged with governance.
d. The auditor is required to inform those charged with governance about significant
misstatements discovered by the auditor and subsequently corrected by management.
correct answers d. The auditor is required to inform those charged with governance about
significant misstatements discovered by the auditor and
subsequently corrected by management.
Which of the following items are included in the auditor's communication to those charged
with governance and in management's representation letter to the
auditor?
I. The auditor's responsibility under generally accepted auditing standards.
, II. Management's responsibility for fair presentation of the financial statements in
conformity with generally accepted accounting principles.
III. Uncorrected, nontrivial misstatements identified by the auditor.
Auditor's Comm. to Governance vs. Mgmt Rep Letter
a. I & III only vs. II & III only
b. I only vs. II only
c. I, II, & III vs. I & II only
d. I & II only vs. I, II, & III correct answers a. I & III only vs. II & III only
U.S. GAAS do NOT require a written communication to those charged with governance to
include:
a. The adequacy of the financial statement disclosures.
b. An overview of the planned scope and timing of the audit.
c. Disagreements with management, whether resolved or not.
d. Significant difficulties encountered in performing the audit. correct answers b. An
overview of the planned scope and timing of the audit.
* may be in writing or orally communicated.
According to professional standards, audit documentation should:
a. Include a flowchart to show the design and implementation of internal control.
