CPA - Audit Exam and Answers 2026
Availability bias Auditors may place an undue amount of emphasis on events or
experiences that come to mind easily (management's explanation for a fluctuation) and ignore
other possibilities that are more difficulty to imagine.
Anchoring bias Auditors place an undue amount of emphasis on an early piece of
information (provided by management), which causes the auditor to use that information as an
anchor against which all other information is improperly evaluated. Auditors may anchor to
their initial belief and be unwilling to adequately consider if subsequent information suggest a
different conclusion.
Automation bias the tendency to favor output from automated systems, even when
conflicting information exists about whether it is reliable or suitable for the auditor's purpose
Confirmation bias auditors may place an undue amount of emphasis on information that
confirms their existing beliefs or expectations. For example, the auditor may expect that I/C are
operating effectively, so they tend to place more weight on evidence that corroborates or
confirms their belief, and they may dismiss evidence that contradicts their belief.
Overconfidence bias Auditors may overestimate their ability to make accurate risk assessments
and quick judgements or decisions.
Human bias (threats to objectivity) If that auditor has a friendly relationship with the auditor
may inadvertently favor the client when evaluating audit evidence.
Misplaced trust in management Auditors who have worked with the client in previous years
may build up a trust in management that is misplaced and unwarranted. Auditors should not
assume that mgmt is honest even when their judgement is based on prior experience.
, Time demandsUnrealistic time budgets can result in auditors taking shortcuts in audit
procedures, such as testing easily obtained evidence rather than evidence that is more difficult
and time consuming to obtain and test
What are Critical Audit Matters (CAMs)? Matters communicated to those charged with
governance that relate to material accounts or disclosures and involve especially challenging,
subjective, or complex auditor judgment
Which audits require CAMs? Issuer (public company) audits under PCAOB standards
Where is the CAM section located in the audit report? After the Basis for Opinion section
What must be included for each CAM? Identification of the matter, why it was a CAM, how
it was addressed, and reference to related financial statement disclosures
Do CAMs provide a separate opinion? No, the auditor explicitly states that no separate
opinion is expressed
What are Key Audit Matters (KAMs)? Matters of most significance in the audit selected from
those communicated with governance
Which audits include KAMs? Audits performed under International Standards on Auditing (ISA)
What do KAMs communicate to users? The areas that required the most auditor attention
during the audit
What is the main difference between CAMs and KAMs? CAMs are used for issuers under
PCAOB with specific criteria, while KAMs are used under ISA and are more broadly defined
Availability bias Auditors may place an undue amount of emphasis on events or
experiences that come to mind easily (management's explanation for a fluctuation) and ignore
other possibilities that are more difficulty to imagine.
Anchoring bias Auditors place an undue amount of emphasis on an early piece of
information (provided by management), which causes the auditor to use that information as an
anchor against which all other information is improperly evaluated. Auditors may anchor to
their initial belief and be unwilling to adequately consider if subsequent information suggest a
different conclusion.
Automation bias the tendency to favor output from automated systems, even when
conflicting information exists about whether it is reliable or suitable for the auditor's purpose
Confirmation bias auditors may place an undue amount of emphasis on information that
confirms their existing beliefs or expectations. For example, the auditor may expect that I/C are
operating effectively, so they tend to place more weight on evidence that corroborates or
confirms their belief, and they may dismiss evidence that contradicts their belief.
Overconfidence bias Auditors may overestimate their ability to make accurate risk assessments
and quick judgements or decisions.
Human bias (threats to objectivity) If that auditor has a friendly relationship with the auditor
may inadvertently favor the client when evaluating audit evidence.
Misplaced trust in management Auditors who have worked with the client in previous years
may build up a trust in management that is misplaced and unwarranted. Auditors should not
assume that mgmt is honest even when their judgement is based on prior experience.
, Time demandsUnrealistic time budgets can result in auditors taking shortcuts in audit
procedures, such as testing easily obtained evidence rather than evidence that is more difficult
and time consuming to obtain and test
What are Critical Audit Matters (CAMs)? Matters communicated to those charged with
governance that relate to material accounts or disclosures and involve especially challenging,
subjective, or complex auditor judgment
Which audits require CAMs? Issuer (public company) audits under PCAOB standards
Where is the CAM section located in the audit report? After the Basis for Opinion section
What must be included for each CAM? Identification of the matter, why it was a CAM, how
it was addressed, and reference to related financial statement disclosures
Do CAMs provide a separate opinion? No, the auditor explicitly states that no separate
opinion is expressed
What are Key Audit Matters (KAMs)? Matters of most significance in the audit selected from
those communicated with governance
Which audits include KAMs? Audits performed under International Standards on Auditing (ISA)
What do KAMs communicate to users? The areas that required the most auditor attention
during the audit
What is the main difference between CAMs and KAMs? CAMs are used for issuers under
PCAOB with specific criteria, while KAMs are used under ISA and are more broadly defined
