CPA Auditing and Attestation (AUD) : CPA Auditing and Attestation (AUD)
Study concepts, example questions & explanations for CPA Auditing and Attestation (AUD)
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Example Questions
Example Question #1 : Types Of Engagements Integrated Audits
Each of the following types of controls is considered to be an entity-level control, except those:
Pertaining to the company's risk assessment process
Regarding the company's annual shareholder meeting
Addressing policies over significant risk management policies
Relating to the control environment
Regarding the company's annual shareholder meeting
Entity level controls include controls related to the control environment, the risk assessment process, and the policies over risk management policies. Controls regarding the company's annual shareholder meeting are controls related to a specific event rather than the entity as a whole.
Example Question #2 : Types Of Engagements Integrated Audits
Internal control over financial reporting consists of which component?
All of these components
Monitoring
Existing control activities
Risk assessment
All of these components
The components not listed would include Information and communication and control environment. These 5 components make up ICFR.
Example Question #1 : Types Of Engagements Government Audits
Government Accounting Standards
Require a written report on compliance with applicable laws and regulations
Require a written report on internal control
May require a duty to report fraud
All of the answer choices are correct
All of the answer choices are correct
Under GASB standards the auditor is required to report on internal control. The written report is also required to establish compliance with applicable laws and regulations and may require a duty to report fraud.
Example Question #1 : Types Of Engagements Government Audits
The Single Audit Act of 1984
Requires on government audit per year
Applies to Federal funding over $750,000
Applies to State funding over $750,000
Requires one audit firm direct the audits of a state or local government agencies
Applies to Federal funding over $750,000
The single audit act of 1984 requires audits of federal funds received over a threshold of $750,000.
Example Question #12 : Compliance, & Government Audits
Governmental audits fall under standards developed by:
GAGAS
None of the answer choices are correct
PCAOB
AICPA
GAGAS
Governmental auditing standards are developed by the General Accounting Office who publishes Generally Accepted Governmental Audit Standards.
Example Question #2 : Types Of Engagements Government Audits
When auditing the financial statements of a governmental entity, the auditor is required to report on A) Noteworthy accomplishments of the program B) The scope of the auditor's testing of internal controls
Neither
B
A
Both
B
When auditing the financial statements of a governmental entity in accordance with GAS, the auditor is required to report on the scope of the auditor's testing of internal control but not on noteworthy accomplishments.
Example Question #3 : Types Of Engagements Government Audits
An enterprise engaged a CPA to audit its financial statements in accordance with GAS because of the provisions of government grant funding agreements. Under these circumstances, the CPA is required to report on the enterprise's internal controls either in the report on the financial statements or in:
The notes to the financial statements
The report on the performance audit
A separate report
A letter to the government funding agency
A separate report
The report on the audit of the financial statements should describe the scope of the auditor's testing of compliance with laws and regulations and internal control over financial reporting and should either present the results of those tests or refer to a separate report containing that info.
Example Question #15 : Compliance, & Government Audits
One of the most notable attributes of governmental audits is that ______.
They ensure absolute assurance
They demand the highest level of assurance
They are the most difficult type of audit
A written report on internal control must be prepared
A written report on internal control must be prepared
This point about governmental audits is heavily tested and the other options are not true about governmental audits.
Example Question #1 : Ethics & Professional Responsibility
The Concept of “due care” requires
None of the above
Perfection
Continual improvement
Best of ability
Best of ability
According to AU 230: The auditor’s responsibility to exercise due care: “Due professional care requires the auditor to exercise professional skepticism. The auditor uses the knowledge, skill, and ability called for by the profession of public accounting to diligently perform, in good faith and with integrity, the gathering and objective evaluation of evidence. Under these guidelines, none of the answers suffice.
Example Question #1 : Ethics Aicpa
“Responsibilities Principle” requires a member to:
All of the above
uphold a client’s wishes
Provide information to those requesting
maintain public confidence
maintain public confidence
Under the AICPA code of professional conduct, the responsibility principle refers to maintaining public trust.
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