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AICPA CPA-Auditing Exam Questions
- Topic 1: Auditing and Attestation (AUD)
- Topic 2: Business Environment and Concepts (BEC)
- Topic 3: Financial Accounting and Reporting (FAR)
Free AICPA CPA-Auditing Exam Actual Questions
Note: Premium Questions for CPA-Auditing were last updated On May. 07, 2025 (see below)
Which of the following factors would least likely affect the nature and extent of audit documentation?
Choice 'd' is correct. The content of the representation letter will generally not affect the nature and extent of audit documentation. Factors affecting the nature and extent of audit documentation include:
1. The risk of material misstatement;
2. The extent to which judgment was required in performing the work and evaluating the results;
3. The nature of the specific auditing procedure;
4. The significance of the evidence obtained;
5. The nature and extent of any problems identified; and
6. The need to document conclusions that may not be obvious.
At the conclusion of an audit, an auditor is reviewing the evidence gathered in support of the financial statements. With regard to the valuation of inventory, the auditor concludes that the evidence obtained is not sufficient to support management's representations. Which of the following actions is the auditor most likely to take?
Choice 'c' is correct. If an auditor has doubts about a material assertion (such as the valuation of inventory), he/she should gather sufficient evidence to eliminate the doubt.
Choices 'a' and 'b' are incorrect. The auditor would not consult with the audit committee regarding the sufficiency of audit evidence obtained, as this is determined based on the auditor's own judgment. In addition, if the auditor is able to obtain additional evidence, it might be possible to issue an unqualified opinion. Finally, even if no additional evidence is available, the auditor will still need to decide whether a qualified opinion or a disclaimer of opinion is more appropriate, depending on materiality.
Choice 'd' is incorrect. Since management representations are in fact 'statements from management,' obtaining additional statements from management would not provide additional support.
Which of the following factors is (are) considered in determining the sample size for a test of controls?
Choice 'a' is correct. To determine the number of items to be selected for a particular sample for a test of controls, the auditor should consider the tolerable rate of deviation from the controls being tested, the likely rate of deviations (expected deviation rate), and the allowable risk of assessing control risk too low.
Choices 'b', 'c', and 'd' are incorrect, per the above Explanation: .
Significant deficiencies are matters that come to an auditor's attention that should be communicated to an entity's management and those charged with governance because they represent:
Choice 'c' is correct. Significant deficiencies in the design or operation of internal control should be communicated to management and those charged with governance because there is more than a remote likelihood that they will result in a financial statement misstatement that is more than inconsequential.
Choice 'a' is incorrect. Information that significantly contradicts the auditor's going concern assumption is not considered a significant deficiency.
Choice 'b' is incorrect. Fraud perpetrated by high-level managers should be reported to the audit committee / those charged with governance, but it does not necessarily represent a significant deficiency in internal control.
Choice 'd' is incorrect. Fraud should be reported to an appropriate level of management, and sometimes to the audit committee / those charged with governance, but it does not necessarily represent a significant deficiency in internal control.
Which of the following is not true with respect to the control activities of an entity?
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