CPA AUDIT EXAM /AUDIT CPA EXAM NEWEST
EXAM QUESTIONS AND CORRECT DETAILED
ANSWERS A NEW UPDATED VERSION LATEST 2025-
2026 (VERIFIED ANSWERS) CPA AUDIT EXAM 2025
ALREADY GRADED A+
Valuation, allocation and accuracy - matching audit procedures - ANSWER-
inspection of documentation supporting transactions
footing and crossfooting of schedules
independent recalculation
reconciliation of supporting schedules to general ledger line items
Existence and occurrence - matching audit procedures - ANSWER-confirmation of
accounts
observation, inspection and examination of assets, processes and procedures
vouching transactions from financial statements back to supporting documents
,Rights and obligations - matching audit procedures - ANSWER-inspection of
documentation supporting transactions, inspection of contracts
Understandability and classification - matching audit procedures - ANSWER-
inspection of documentation supporting transactions
review of all related disclosures for compliances with GAAP
inquiry of management - regarding disclosures for the account and or related
accounts
Transaction cycles - ANSWER-Revenue, expenditure, inventory, investments,
property plant and equipment, payroll and personnel, financing
Confirmations are a required audit procedures except... - ANSWER-when
receivables are immaterial
confirmation would be ineffective
inherent and controls risks are very low and evidence provided by other
procedures is sufficient to reduce audit risk to an acceptable level
Voucher package that treasurer reviews before preparing and signing check -
ANSWER-purchase requisition, purchase order, receiving report, invoice and the
approved voucher from acct pay
Management is responsible for - ANSWER-Financial statements - the preparation
and fair presentation
Internal controls - design, implementation and maintenance relevant to the FS
Providing auditor with access to info and persons needed to complete the audit
,The preparation and fair presentation of the FS requires - ANSWER-identification
of the applicable financial reporting framework
preparation and fair presentation in accordance with framework
inclusion of adequate description of the framework
to obtain reasonable assurance - ANSWER-plan the work and properly supervise
the assistants
determine and apply appropriate materiality levels
identify and assess risks of material misstatement, whether due to error or fraud
and obtain sufficient appropriate audit evidence
The applicable financial reporting framework - ANSWER-The financial reporting
framework that is acceptable in view of the nature of the entity and the objective
of the financial statements
Includes general purpose: designed to meet needs of a wide range of users (GAAP
& IFRS) and special purpose frameworks
Fair presentation frameworks - ANSWER-All financial reporting frameworks in the
US are fair presentation frameworks
Acknowledges explicity or implicitly that to achieve fair presentation of the FS, it
may be necessary for management to provide disclosures beyond those
specifically required
Acknowledges explicitly that it may be necessary for mgmt (RARE) to depart from
a requirement to achieve fair presentation
, Auditing standards - ANSWER-(GAAS) Generally accepted auditing standards -
mandatory on all audit engagements
(GAGAS) Generally accepted government auditing standards - audits of
government organizations, programs or activities that receive government funds
(PCAOB) - established pursuant to SOX - establish auditing standards for issuers
(ISA) International standards of auditing
The term "must" or "is required" - ANSWER-indicates an unconditional
requirement
must be followed in all cases
The term "should" - ANSWER-presumptively mandatory requirement
must be followed in all cases where the requirement is relevant but allows for
departures in rare circumstances if there is appropriate justification
Conditions that indicate possible fraud - ANSWER-Pressure
Opportunity
Rationalization
If there is substantial doubt about going concern, the auditor should: - ANSWER-
consider the adequacy of the disclosure about the entity's possible inability to
continue as a going concern
include an emphasis of matter paragraph in the auditors report to reflect this
conclusion
EXAM QUESTIONS AND CORRECT DETAILED
ANSWERS A NEW UPDATED VERSION LATEST 2025-
2026 (VERIFIED ANSWERS) CPA AUDIT EXAM 2025
ALREADY GRADED A+
Valuation, allocation and accuracy - matching audit procedures - ANSWER-
inspection of documentation supporting transactions
footing and crossfooting of schedules
independent recalculation
reconciliation of supporting schedules to general ledger line items
Existence and occurrence - matching audit procedures - ANSWER-confirmation of
accounts
observation, inspection and examination of assets, processes and procedures
vouching transactions from financial statements back to supporting documents
,Rights and obligations - matching audit procedures - ANSWER-inspection of
documentation supporting transactions, inspection of contracts
Understandability and classification - matching audit procedures - ANSWER-
inspection of documentation supporting transactions
review of all related disclosures for compliances with GAAP
inquiry of management - regarding disclosures for the account and or related
accounts
Transaction cycles - ANSWER-Revenue, expenditure, inventory, investments,
property plant and equipment, payroll and personnel, financing
Confirmations are a required audit procedures except... - ANSWER-when
receivables are immaterial
confirmation would be ineffective
inherent and controls risks are very low and evidence provided by other
procedures is sufficient to reduce audit risk to an acceptable level
Voucher package that treasurer reviews before preparing and signing check -
ANSWER-purchase requisition, purchase order, receiving report, invoice and the
approved voucher from acct pay
Management is responsible for - ANSWER-Financial statements - the preparation
and fair presentation
Internal controls - design, implementation and maintenance relevant to the FS
Providing auditor with access to info and persons needed to complete the audit
,The preparation and fair presentation of the FS requires - ANSWER-identification
of the applicable financial reporting framework
preparation and fair presentation in accordance with framework
inclusion of adequate description of the framework
to obtain reasonable assurance - ANSWER-plan the work and properly supervise
the assistants
determine and apply appropriate materiality levels
identify and assess risks of material misstatement, whether due to error or fraud
and obtain sufficient appropriate audit evidence
The applicable financial reporting framework - ANSWER-The financial reporting
framework that is acceptable in view of the nature of the entity and the objective
of the financial statements
Includes general purpose: designed to meet needs of a wide range of users (GAAP
& IFRS) and special purpose frameworks
Fair presentation frameworks - ANSWER-All financial reporting frameworks in the
US are fair presentation frameworks
Acknowledges explicity or implicitly that to achieve fair presentation of the FS, it
may be necessary for management to provide disclosures beyond those
specifically required
Acknowledges explicitly that it may be necessary for mgmt (RARE) to depart from
a requirement to achieve fair presentation
, Auditing standards - ANSWER-(GAAS) Generally accepted auditing standards -
mandatory on all audit engagements
(GAGAS) Generally accepted government auditing standards - audits of
government organizations, programs or activities that receive government funds
(PCAOB) - established pursuant to SOX - establish auditing standards for issuers
(ISA) International standards of auditing
The term "must" or "is required" - ANSWER-indicates an unconditional
requirement
must be followed in all cases
The term "should" - ANSWER-presumptively mandatory requirement
must be followed in all cases where the requirement is relevant but allows for
departures in rare circumstances if there is appropriate justification
Conditions that indicate possible fraud - ANSWER-Pressure
Opportunity
Rationalization
If there is substantial doubt about going concern, the auditor should: - ANSWER-
consider the adequacy of the disclosure about the entity's possible inability to
continue as a going concern
include an emphasis of matter paragraph in the auditors report to reflect this
conclusion
