AUD CPA EXAM ACTUAL EXAM/ MOSTLY TESTED QUESTIONS
AND CORRECT DETAILED ANSWERS| 100% CORRECT
SOLUTIONS/GRADE A+
A record used to track and
document all transactions in a
checking account, including
check register
deposits, withdrawals, and checks,
helping to maintain an accurate
balance and prevent overdrafts.
a claim or representation made by a
company's management about the
What is assertion?
accuracy and completeness of its
financial statements
, present value of all benefits earned
by employees, both active and
PBO (pension benefit obligation)
retired, under a defined benefit
pension plan.
1. consider integrity of management
2. materiality levels (may need
When auditor suspects fraud, should follow adjustment)
steps: 3. implication for other audit areas.
4. report to higher level of
management.
Vouching test existence
Tracing
test completeness Deed
a doc to show transfer of ownership, doesn't
Mortgage loan
include sales price/ asset cost.
,a doc to confirm the outstanding loan balance,
Closing statement
but no property cost information.
Closing statement: records transactions details
Long term debt/ payable
and commonly used when purchase a property.
describes a financial obligation with a maturity
exceeding one year, ie that is not coming due Provision
within the next twelve months.
funds put aside by a company used to cover
Engagement letter
future loss
states clear that auditor will contact management
team for any deficiencies and material weakness
identified. Then, if anything identified, auditor will Predecessor auditor
communicate with those charged with
governance and management in writing.
only discuss management integrity issue/ Examining tangible goods and
disagreement and won't talk about engagement determine the impaired value (which
specifics such as timetable in prior years. assertion?)
Inventory count and procedure
inspection performed by others (which
assertion?)
, observation Variables sampling
test of details/ substantive testing Attribute sampling
test of controls/ reaching conclusion in terms of
Type I Error
occurrence.
Assessing RMM too high, this error is easy to fix Type II error
Assessing RMM too low, this error is hard to fix Attribute sampling:
Sample deviation rate + allowance
does not apply to risk assessment procedures.
= upper limit
useful to detect Overstatement:
dollar unit sampling;
treat each dollar value as sampling
PPS (Probability proportional sampling)
unit.
PPS will result stratified sample
Not good to use if the sample has
AND CORRECT DETAILED ANSWERS| 100% CORRECT
SOLUTIONS/GRADE A+
A record used to track and
document all transactions in a
checking account, including
check register
deposits, withdrawals, and checks,
helping to maintain an accurate
balance and prevent overdrafts.
a claim or representation made by a
company's management about the
What is assertion?
accuracy and completeness of its
financial statements
, present value of all benefits earned
by employees, both active and
PBO (pension benefit obligation)
retired, under a defined benefit
pension plan.
1. consider integrity of management
2. materiality levels (may need
When auditor suspects fraud, should follow adjustment)
steps: 3. implication for other audit areas.
4. report to higher level of
management.
Vouching test existence
Tracing
test completeness Deed
a doc to show transfer of ownership, doesn't
Mortgage loan
include sales price/ asset cost.
,a doc to confirm the outstanding loan balance,
Closing statement
but no property cost information.
Closing statement: records transactions details
Long term debt/ payable
and commonly used when purchase a property.
describes a financial obligation with a maturity
exceeding one year, ie that is not coming due Provision
within the next twelve months.
funds put aside by a company used to cover
Engagement letter
future loss
states clear that auditor will contact management
team for any deficiencies and material weakness
identified. Then, if anything identified, auditor will Predecessor auditor
communicate with those charged with
governance and management in writing.
only discuss management integrity issue/ Examining tangible goods and
disagreement and won't talk about engagement determine the impaired value (which
specifics such as timetable in prior years. assertion?)
Inventory count and procedure
inspection performed by others (which
assertion?)
, observation Variables sampling
test of details/ substantive testing Attribute sampling
test of controls/ reaching conclusion in terms of
Type I Error
occurrence.
Assessing RMM too high, this error is easy to fix Type II error
Assessing RMM too low, this error is hard to fix Attribute sampling:
Sample deviation rate + allowance
does not apply to risk assessment procedures.
= upper limit
useful to detect Overstatement:
dollar unit sampling;
treat each dollar value as sampling
PPS (Probability proportional sampling)
unit.
PPS will result stratified sample
Not good to use if the sample has
