Latest CPA-Auditing Dumps (V8.02) for Preparing More Effectively and Passing the CPA Auditing and Attestation (AUD) Section – Check CPA-Auditing Free Dumps (Part 1, Q1-Q40) First

When coming for your Certified Public Accountant (CPA) exam, you must complete three core sections and one discipline section in total. And the CPA Auditing and Attestation (AUD) is one of the core sections, focusing on audit procedures, internal controls, and audit reporting. And now, you can prepare more effectively with the latest CPA-Auditing exam questions for this AUD section. DumpsBase has the latest CPA-Auditing dumps (V8.02), designed to align closely with current exam objectives and real testing scenarios. These up-to-date exam questions cover all critical domains, helping you build a solid and well-rounded understanding of the subject. Choose DumpsBase CPA-Auditing exam dumps today. By incorporating these comprehensive exam questions into your study plan, you can boost your confidence, enhance your exam readiness, and significantly increase your chances of passing the CPA Auditing and Attestation (AUD) exam on your first attempt.

Check CPA-Auditing free dumps (Part 1, Q1-Q40) of V8.02 first to access quality first:

1. Because of the risk of material misstatement, an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of:

Objective judgment.

Independent integrity.

Professional skepticism.

Impartial conservatism.

2. An auditor of a nonpublic company must conduct the audit in accordance with:

I. ASB standards.

II. PCAOB standards.

Both I and I

Either I or II, but not both.

I

3. Under which of the following circumstances would a disclaimer of opinion not be appropriate?

The financial statements fail to contain adequate disclosure of related party transactions.

The client refuses to permit its attorney to furnish information requested in a letter of audit inquiry.

The auditor is engaged after fiscal year-end and is unable to observe physical inventories or apply alternative procedures to verify their balances.

The auditor is unable to determine the amounts associated with illegal acts committed by the client's management.

4. When an independent CPA is associated with the financial statements of a publicly held entity but has not audited or reviewed such statements, the appropriate form of report to be issued must include a(an):

Regulation S-X exemption.

Report on pro forma financial statements.

Unaudited association report.

Disclaimer of opinion.

5. Which of the following reporting options is least likely with regard to supplementary information that is required by GAAP?

The auditor's report on the financial statements makes no reference to the supplementary information.

A disclaimer of opinion is issued on supplementary information that is not clearly distinguished from the financial statements and is not marked "unaudited."

The auditor's report on the financial statements includes both an opinion on the supplementary information and a statement restricting the use of the report.

The auditor's report on the financial statements includes an opinion regarding whether the supplementary information is fairly stated in all material respects in relation to the financial statements taken as a whole.

6. When audited financial statements are presented in a client's document containing other information, the auditor should:

Perform inquiry and analytical procedures to ascertain whether the other information is reasonable.

Add an explanatory paragraph to the auditor’s report without changing the opinion on the financial statements.

Perform the appropriate substantive auditing procedures to corroborate the other information.

Read the other information to determine that it is consistent with the audited financial statements.

7. For an entity's financial statements to be presented fairly in conformity with generally accepted accounting principles, the principles selected should:

Be applied on a basis consistent with those followed in the prior year.

Be approved by the Auditing Standards Board or the appropriate industry subcommittee.

Reflect transactions in a manner that presents the financial statements within a range of acceptable limits.

Match the principles used by most other entities within the entity's particular industry.

8. March, CPA, is engaged by Monday Corp., a client, to audit the financial statements of Wall Corp., a company that is not March's client. Monday expects to present Wall's audited financial statements with March's auditor's report to 1st Federal Bank to obtain financing in Monday's attempt to purchase Wall.

In these circumstances, March's auditor's report would usually be addressed to:

Monday Corp., the client that engaged March.

Wall Corp., the entity audited by March.

1st Federal Bank.

Both Monday Corp. and 1st Federal Bank.

9. After issuing a report, an auditor has no obligation to make continuing inquiries or perform other procedures concerning the audited financial statements, unless:

Information, which existed at the report date and may affect the report, comes to the auditor's attention.

Management of the entity requests the auditor to reissue the auditor's report.

Information about an event that occurred after the date of the auditor's report comes to the auditor's attention.

Final determinations or resolutions are made of contingencies that had been disclosed in the financial statements.

10. Which of the following is true regarding the standard audit report for an issuer?

Reference should be made in the scope paragraph to both PCAOB standards and generally accepted auditing standards.

PCAOB standards should not be mentioned at all, although their use is implied in the standard auditor's report.

Reference should be made in the scope paragraph to PCAOB standards, and in the opinion paragraph to generally accepted accounting principles.

Reference may be made in the scope paragraph to either PCAOB standards or generally accepted auditing standards.

11. The following explanatory paragraph was included in an auditor's report to indicate a lack of consistency:

"As discussed in note T to the financial statements, the company changed its method of computing depreciation in X0."

How should the auditor report on this matter if the auditor concurred with the change?

Type of Location of opinion explanatory paragraph

Unqualified Before opinion paragraph

Unqualified After opinion paragraph

Qualified Before opinion paragraph

Qualified After opinion paragraph

12. An auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time.

If the entity's disclosures concerning this matter are adequate, the audit report may include a(an):

Option A

Option B

Option C

Option D

13. Pell, CPA, decides to serve as principal auditor in the audit of the financial statements of Tech Consolidated, Inc. Smith, CPA, audits one of Tech's subsidiaries.

In which situation(s) should Pell make reference to Smith's audit?

I. Pell reviews Smith's audit documentation and assumes responsibility for Smith's work, but expresses a qualified opinion on Tech's financial statements.

II. Pell is unable to review Smith's audit documentation; however, Pell's inquiries indicate that Smith has an excellent reputation for professional competence and integrity.

I only.

II only.

Both I and I

Neither I nor I

14. When there has been a change in accounting principle that materially affects the comparability of the comparative financial statements presented and the auditor concurs with the change, the auditor should:

Option A

Option B

Option C

Option D

15. Which of the following statements is not true regarding the auditor's responsibility for subsequent

events?

The auditor has an active responsibility to make continuing inquiries between the date of the auditor's report and the date on which the report is submitted.

The auditor has an active responsibility to make continuing inquiries between the date of the financial statements and the date of the auditor's report.

The auditor has an active responsibility to make continuing inquiries between the date of the financial statements and the date on which sufficient appropriate audit evidence has been obtained.

The auditor has no active responsibility to make continuing inquiries after the date of the auditor's report.

16. In which of the following situations would an auditor ordinarily choose between expressing an "except for" qualified opinion or an adverse opinion?

The auditor did not observe the entity's physical inventory and is unable to become satisfied as to its balance by other auditing procedures.

The financial statements fail to disclose information that is required by generally accepted accounting principles.

The auditor is asked to report only on the entity's balance sheet and not on the other basic financial statements.

Events disclosed in the financial statements cause the auditor to have substantial doubt about the entity's ability to continue as a going concern.

17. When an auditor believes there is substantial doubt about the ability of an entity to continue as a going concern, all of the following should be included in the audit documentation, except:

The conditions that gave rise to the substantial doubt.

The auditor's conclusion about whether substantial doubt remains or is alleviated.

Management's conclusion regarding whether substantial doubt remains or is alleviated.

The effect of the auditor's conclusion on the auditor's report.

18. An auditor most likely would express an unqualified opinion and would not add explanatory language to the report if the auditor:

Wishes to emphasize that the entity had significant transactions with related parties.

Concurs with the entity's change in its method of computing depreciation.

Discovers that supplementary information required by FASB has been omitted.

Believes that there is a probable likelihood of a material loss resulting from an uncertainty that is sufficiently supported and disclosed.

19. Under which of the following circumstances would an auditor's expression of an unqualified opinion be inappropriate?

The auditor is unable to obtain the audited financial statements of a significant subsidiary.

The financial statements are prepared on the entity's income tax basis.

There are significant deficiencies in the design and operation of the entity's internal control.

Analytical procedures indicate that many year-end account balances are not comparable with the prior year's balances.

20. In which of the following circumstances would an auditor not express an unqualified opinion?

There has been a material change between periods in accounting principles.

Quarterly financial data required by the SEC has been omitted.

The auditor wishes to emphasize an unusually important subsequent event.

The auditor is unable to obtain audited financial statements of a consolidated investee.

21. An auditor would express an unqualified opinion with an explanatory paragraph added to the auditor's report for:

Option A

Option B

Option C

Option D

22. If a publicly held company issues financial statements that purport to present its financial position and results of operations but omits the statement of cash flows, the auditor ordinarily will express a(an):

Disclaimer of opinion.

Qualified opinion.

Review report.

Unqualified opinion with a separate explanatory paragraph.

23. Which of the following procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

Performing cutoff tests of sales transactions with customers with long-standing receivable balances.

Evaluating the entity's procedures for identifying and recording related party transactions.

Inspecting title documents to verify whether any real property is pledged as collateral.

Inquiring of the entity's legal counsel about litigation, claims, and assessments.

24. An auditor may report on condensed financial statements that are derived from complete financial statements if the:

Condensed financial statements are distributed to stockholders along with the complete financial statements.

Auditor describes the additional procedures performed on the condensed financial statements.

Auditor indicates whether the information in the condensed financial statements is fairly stated in all material respects in relation to the complete financial statements from which it has been derived.

Condensed financial statements are presented in comparative form with the prior year's condensed financial statements.

25. Which of the following is not true regarding an engagement to provide a written report on the application of accounting principles?

An accountant is prohibited from providing a report on the application of accounting principles to a transaction not involving the facts and circumstances of a specific entity.

The accountant's written report on the application of accounting principles should include an identification of the specific entity involved.

An accountant is prohibited from providing a report on the application of accounting principles to a proposed future transaction involving the facts and circumstances of a specific entity.

The accountant's written report on the application of accounting principles should include a paragraph restricting the use of the report.

26. A CPA's standard report on audited financial statements would be inappropriate if it referred to:

Management's responsibility for the financial statements.

An assessment of the entity's accounting principles.

Significant estimates made by management.

The CPA's assessment of sampling risk factors.

27. When management does not provide reasonable justification that a change in accounting principle is preferable and it presents comparative financial statements, the auditor should express a qualified opinion:

Only in the year of the accounting principle change.

Each year that the financial statements initially reflecting the change are presented.

Each year until management changes back to the accounting principle formerly used.

Only if the change is to an accounting principle that is not generally accepted.

28. An auditor is considering whether the omission of a substantive procedure considered necessary at the time of an audit may impair the auditor's present ability to support the previously expressed opinion.

The auditor need not apply the omitted procedure if the:

Financial statements and auditor's report were not distributed beyond management and the board of directors.

Auditor's previously expressed opinion was qualified because of a departure from GAA

Results of other procedures that were applied tend to compensate for the procedure omitted.

Omission is due to unreasonable delays by client personnel in providing data on a timely basis.

29. Comparative financial statements include the financial statements of the prior year that were audited by a predecessor auditor whose report is not presented.

If the predecessor's report was qualified, the successor should:

Indicate the substantive reasons for the qualification in the predecessor auditor's opinion.

Request the client to reissue the predecessor's report on the prior year's statements.

Issue an updated comparative audit report indicating the division of responsibility.

Express an opinion only on the current year's statements and make no reference to the prior year's statements.

30. An auditor believes that there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time. In evaluating the entity's plans for dealing with the adverse effects of future conditions and events, the auditor most likely would consider, as a mitigating factor, the entity's plans to:

Repurchase the entity's stock at a price below its book value.

Issue stock options to key executives.

Lease rather than purchase operating facilities.

Accelerate the due date of an existing mortgage.

31. When disclaiming an opinion due to a client-imposed scope limitation, an auditor should indicate in a separate paragraph why the audit did not comply with generally accepted auditing standards.

The auditor should also omit the:

Option A

Option B

Option C

Option D

32. Restrictions imposed by a client prohibit the observation of physical inventories, which account for 35% of all assets. Alternative audit procedures cannot be applied, although the auditor was able to examine satisfactory evidence for all other items in the financial statements.

The auditor should issue a(an):

"Except for" qualified opinion.

Disclaimer of opinion.

Unqualified opinion with a separate explanatory paragraph.

Unqualified opinion with an in the scope paragraph.

33. When an auditor expresses an adverse opinion, the opinion paragraph should include:

The principal effects of the departure from generally accepted accounting principles.

A direct reference to a separate paragraph disclosing the basis for the opinion.

The substantive reasons for the financial statements being misleading.

A description of the uncertainty or scope limitation that prevents an unqualified opinion.

34. An auditor was unable to obtain sufficient appropriate audit evidence concerning certain transactions due to an inadequacy in the entity's accounting records.

The auditor would choose between issuing a(an):

Qualified opinion and an unqualified opinion with an explanatory paragraph.

Unqualified opinion with an explanatory paragraph and an adverse opinion.

Adverse opinion and a disclaimer of opinion.

Disclaimer of opinion and a qualified opinion.

35. In May X4, an auditor reissues the auditor's report on the X2 financial statements at a continuing client's request. The X2 financial statements are not restated and the auditor does not revise the wording of the report.

The auditor should:

Dual date the reissued report.

Use the release date of the reissued report.

Use the original report date on the reissued report.

Use the current-period auditor's report date on the reissued report.

36. When an independent CPA assists in preparing the financial statements of a publicly held entity, but has not audited or reviewed them, the CPA should issue a disclaimer of opinion. In such situations, the CPA has no responsibility to apply any procedures beyond:

Documenting that internal control is not being relied on.

Reading the financial statements for obvious material misstatements.

Ascertaining whether the financial statements are in conformity with GAA

Determining whether management has elected to omit substantially all required disclosures.

37. On March 15, X4, Kent, CPA, issued an unqualified opinion on a client's audited financial statements for the year ended December 31, X3. On May 4, X4, Kent's internal inspection program disclosed that engagement personnel failed to observe the client's physical inventory. Omission of this procedure impairs Kent's present ability to support the unqualified opinion.

If the stockholders are currently relying on the opinion, Kent should first:

Advise management to disclose to the stockholders that Kent's unqualified opinion should not be relied on.

Undertake to apply alternative procedures that would provide a satisfactory basis for the unqualified opinion.

Reissue the auditor's report and add an explanatory paragraph describing the departure from generally accepted auditing standards.

Compensate for the omitted procedure by performing tests of controls to reduce audit risk to a sufficiently low level.

38. In the auditor's report, the principal auditor decides not to make reference to another CPA who audited a client's subsidiary.

The principal auditor could justify this decision if, among other requirements, the principal auditor:

Issues an unqualified opinion on the consolidated financial statements.

Learns that the other CPA issued an unqualified opinion on the subsidiary's financial statements.

Is unable to review the audit programs and audit documentation of the other CP

Is satisfied as to the independence and professional reputation of the other CP

39. Green, CPA, was engaged to audit the financial statements of Essex Co. after its fiscal year had ended. The timing of Green's appointment as auditor and the start of fieldwork made confirmation of accounts receivable by direct communication with the debtors ineffective. However, Green applied other procedures and was satisfied as to the reasonableness of the account balances.

Green's auditor's report most likely contained a(an):

Unqualified opinion.

Unqualified opinion with an explanatory paragraph.

Qualified opinion due to a scope limitation.

Qualified opinion due to a departure from generally accepted auditing standards.

40. Subsequent to the issuance of an auditor's report, the auditor became aware of facts existing at the report date that would have affected the report had the auditor then been aware of such facts. After determining that the information is reliable, the auditor should next:

Determine whether there are persons relying or likely to rely on the financial statements who would attach importance to the information.

Request that management disclose the newly discovered information by issuing revised financial statements.

Issue revised pro forma financial statements taking into consideration the newly discovered information.

Give public notice that the auditor is no longer associated with financial statements.

 Loading...