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 #7 : Audit Reports
The following roles fall under the FROR:
Chief Financial Officer
Marketing Director
Staff Accountant
Information Systems Director
Chief Financial Officer
The Financial Reporting Oversight Role as defined by Rule 3501 of the PCAOB: “The term "financial reporting oversight role" means a role in which a person is in a position to or does exercise influence over the contents of the financial statements or anyone who prepares them, such as when the person is a member of the board of directors or similar management or governing body, chief executive officer, president, chief financial officer, chief operating officer, general counsel, chief accounting officer, controller, director of internal audit, director of financial reporting, treasurer, or any equivalent position.”
Example Question #4 : Professional Standards
An auditor of a non-issuer must conduct the audit in accordance with A) ASB Standards B) PCAOB Standards
A
Both
B
Neither
A
An auditor of a non-issuer must conduct the audit in accordance with ASB Standards.
Example Question #1 : Professional Standards
Of the following, which provides the most authoritative guidance for an audit of an issuer?
Specific guidance provided by the Statement on Auditing Standards
An article in the AICPA CPA letter addressing frequently asked questions on a new auditing standard
Audit disclosure checklists obtained from a continuing professional education class
General guidance provided by the PCAOB
General guidance provided by the PCAOB
General guidance by the PCAOB is the most authoritative level of auditing guidance for audits of issuers.
Example Question #2 : Professional Standards
An auditor has been prevented from conducting full due diligence and proper audit procedures for the engagement of a company. He does not feel that he has examined enough evidence and is deciding how to issue an opinion. Which should be his choice?
Unmodified
Modified
Misstatement
Disclaimer of opinion
Disclaimer of opinion
The auditor cannot issue a positive or negative opinion, simply disclaiming the opinion since he was unable to determine anything about the company.
Example Question #21 : Cpa Auditing And Attestation (Aud)
A “proof of cash”
recalculates the cash account
requires an attestation report from the controller
involves counting the physical cash on hand
compares the beginning balance per the bank plus deposits minus checks with the beginning book balance plus receipts minus disbursements
compares the beginning balance per the bank plus deposits minus checks with the beginning book balance plus receipts minus disbursements
A proof of cash is an audit technique designed to roll forward each line of the bank reconciliation from one period to the next. The beginning balance of the bank is compared to the beginning balance of the book and the receipts and disbursements are traced to the ending balances.
Example Question #22 : Cpa Auditing And Attestation (Aud)
When an auditor requires verification of material accounts receivable balances, they would most likely:
Request a positive confirmation from the customer
Request a negative confirmation from management
Request a positive confirmation from management
Request a negative confirmation from the customer
Request a positive confirmation from the customer
A “positive confirmation” requires the recipient to respond affirmatively to the auditor regarding the account balance. The positive confirmation is used to confirm material amounts.
Example Question #23 : Cpa Auditing And Attestation (Aud)
When no response is received from a positive confirmation the auditor should:
write off the receivable
issue a qualified opinion
switch to a negative confirmation
resend the confirmation
resend the confirmation
A “positive confirmation” requires an affirmative response. If during the course of an audit a “positive confirmation” is not received, it is incumbent upon the auditor to follow up on outstanding confirmations, resending the confirmation if no response is received.
Example Question #4 : Audit Engagements Evidence
Of the following elements, which is applicable to a CPA firm's quality control policy and procedures in an audit practice?
Technology selection
Information processing
Engagement performance
Professional skepticism
Engagement performance
Performance of the engagement is one of the 6 interrelated elements of quality control.
Example Question #24 : Cpa Auditing And Attestation (Aud)
A basic objective of a CPA firm is to provide professional services that conform to professional standards. Reasonable assurance of achieving this basic objective is provided through:
A system of quality control
Compliance with Generally Accepted Reporting Standards
A system of peer review
CPE
A system of quality control
A system of quality control establishes policies and procedures that provide reasonable assurance of conforming with professional standards.
Example Question #6 : Audit Engagements Evidence
Of the following, which is not an instance to use an Emphasis of Matter paragraph?
Change of CEO
Special purpose framework
Change in accounting principle
Going concern issue
Change of CEO
The only other time to use this paragraph would be when subsequent events lead to a change in the audit opinion.
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