All CPA Auditing and Attestation (AUD) Resources
Example Questions
Example Question #1 : Ethics & Professional Responsibility
The Concept of “due care” requires
None of the above
Best of ability
Continual improvement
Perfection
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
Provide information to those requesting
maintain public confidence
uphold a client’s wishes
maintain public confidence
Under the AICPA code of professional conduct, the responsibility principle refers to maintaining public trust.
Example Question #2 : Ethics Aicpa
Under the “Scope and nature of services principle; a member is required to:
maintain quality of control procedures
offer services on request
monitor other members
be annually reviewed by the AICPA
maintain quality of control procedures
Under the AICPA code of professional conduct, the “scope and nature of services” principle requires that practitioners work in firms that maintain appropriate quality control procedures.
Example Question #3 : Ethics Aicpa
An independent auditor must have which of the following?
A background in many different disciplines
A pre-existing and well informed point of view with respect to the audit
Experience in taxation that is sufficient to comply with GAAS
Technical training that is adequate to meet the requirements of a professional
Technical training that is adequate to meet the requirements of a professional
The General Standards Rule of the AICPA Code of Professional Conduct states that the auditor must have adequate technical training as an auditor.
Example Question #4 : Ethics Aicpa
A CPA who is not in public practice is obligated to follow which of the following rules of conduct?
Independence
Contingent fees
Integrity and objectivity
Commissions
Integrity and objectivity
A CPA must maintain objectivity and integrity in the performance of any professional service.
Example Question #5 : Ethics Aicpa
A member of the AICPA performing an audit, review, compilation, or other professional services must abide by:
Strict audit procedures
PCAOB procedures
Professional competence
All of the answer choices are correct
Professional competence
PCAOB procedures are to be obeyed for public company engagements. In addition to professional competence, there is due professional care, planning and supervision, and sufficient relevant data.
Example Question #1 : Ethics Sec & Pcaob
In order to maintain independence, a partner, principal, shareholder or professional employee of a firm may not hold more than ____% in a client's stock.
5%
10%
1%
25%
5%
According to PCAOB guidelines: “During the period of the professional engagement, a partner or professional employee of the firm, his or her immediate family, or any group of such persons acting together owned more than 5 percent of a client’s outstanding equity securities or other ownership interests.”
Example Question #2 : Ethics Sec & Pcaob
Independence is impaired by:
Members in the same alumni association with the CEO of a client
Banking in an institution used by the client
employment relationship with the client
Association membership with client management
employment relationship with the client
Under AICPA and PCAOB guidelines, independence is impaired by an employment arrangement with a client. Under ET Section 100: Participated on the attest engagement team or was an individual in a position to influence the attest engagement for the client when the attest engagement covers any period that includes his or her former employment or association with that client.”
Example Question #3 : Ethics Sec & Pcaob
Ron Johnson is the lead audit partner on the engagement with Abco, Inc. (a public company). Mr. Johnson must be rotated from the engagement every:
Seven Years
Never
Five Years
10 Years
Five Years
Under PCAOB standards for public companies, an audit lead is required to rotate every five years. The guidance provided by the PCAOB includes the following: “Auditors have many rigorous standards that must be upheld that are supposed to create independence from the companies they audit. One of the most important is the mandatory lead rotation every five years. This is a much more cost-effective way of increasing independence between auditors and clients. When the lead auditor changes, they must “start from scratch” with their client, which means no longstanding relationship is intact. In addition, the audit firm will have to spend less time on the audit than if it were an entirely new company, which saves massive amounts of time, and most importantly, money.”
Example Question #4 : Ethics Sec & Pcaob
An issuer may hire an employee of a registered public accounting firm who served on the audit engagement team within the previous year for which of the following positions?
Controller
CFO
CEO
Staff accountant
Staff accountant
SOX and SEC rules prohibit an accounting firm from auditing an issuer's financial statements if certain members of management of the issuer had been members of the firm's audit engagement team within the one year period preceding the beginning of audit procedures. These positions include CEO, CFO, and controller.