CPA Auditing and Attestation (AUD) : Audit Reports
Study concepts, example questions & explanations for CPA Auditing and Attestation (AUD)
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Example Questions
Example Question #3 : Audit Engagements Auditors
The six traits of professional skepticism include
minimum judgement
an open mind
prejudging outcomes
suspension of judgment
an open mind
One of the six traits of professional skepticism requires maintaining an “open mind”. This is also commonly referred to as a “questioning mind”. The avoidance of prejudging outcomes is inherent in the qualitative factors of an “open mind”.
Example Question #4 : Audit Engagements Auditors
A registered CPA auditing firm would be reasonably assured of meeting its responsibility to provide services that conform with professional standards by:
Maintaining an appropriate system of quality control
Having an attitude of independence with regard to engagements
Abiding by GAAS
Joining professional societies that enforce ethical conduct
Maintaining an appropriate system of quality control
Quality control standards relate to the conduct of a firm's audit practice. They set forth standards for establishing policies and procedures to provide reasonable assurance in conforming with standards.
Example Question #5 : Audit Engagements Auditors
Of the following elements, which is not an element of a CPA firm's quality control policies and procedures?
Human resources
Monitoring
Compensation checkpoints
Leadership responsibilities
Compensation checkpoints
In addition to HR, leadership responsibilities and monitoring, Engagement Acceptance and Continuance, Performance of the Engagement, and Ethical requirements are included as quality control elements.
Example Question #2 : Audit Engagements Auditors
In the process of evaluating whether or not an accounting change by a company is acceptable, an auditor should consider if:
The company CEO is in favor of the change
The shareholders of the company are in favor of the change
The company's employees are in favor of the change
The new accounting principle obeys the proper financial reporting framework
The new accounting principle obeys the proper financial reporting framework
If there is an accounting principle change by a company, it should be justifiable, for a reason, and it should obey any laws and reporting regulations.
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