CPA Practice Exam Set
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Test your readiness with this CPA Practice Exam. These questions mirror the format and difficulty of the actual exam to help you identify weak areas. Covers core topics from AUD, FAR, and REG.

CPA Practice Exam Set
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25 Questions

1. The _______ requires a member to be honest and candid within the constraints of client confidentiality.

2. During 20X1, TWD changed its method of preparing its financial statements from the cash basis to generally accepted accounting principles. The audit risk would:

3. During December 20X1, TWD signed a contract to lease disposal equipment from an entity owned by Mead's parents. This related party transaction is not disclosed in TWD's notes to its 20X1 financial statements. The audit risk would:

4. If a difference between auditor expectations and actual results in a financial statement audit test cannot be explained, even after performing other audit procedures, which of the following is likely to be the most appropriate initial auditor response?

5. During December 20X1, TWD increased its casualty insurance coverage on several pieces of sophisticated machinery from historical cost to replacement cost. The audit risk would:

6. When auditing related party transactions, an auditor places primary emphasis on:

7. For which of the following audit tests would an auditor most likely use attribute sampling?

8. An auditor observes the mailing of monthly statements to a client's customers and reviews evidence of follow-up on errors reported by the customers. This test of controls most likely is performed to support management's financial statement assertion of:

9. TWD's bank has a loan officer who meets regularly with TWD's CEO and controller to monitor TWD's financial performance. The audit risk would:

10. Existence is one of the general assertions regarding a client's inventory balance. Which of the following is not a substantive auditing procedure related to this assertion?

11. According to the PCAOB, which of the following tax services may be provided jointly with the audit of an issuer's financial statements without impairing independence?

12. Which of the following representations does an accountant make implicitly when issuing the standard report for the compilation of a nonissuer's financial statements?

13. An auditor determines that the entity is presenting certain supplementary financial disclosures of pension information that are required by the GASB. Under these circumstances, the auditor should:

14. Which of the following factors most likely would assist an independent auditor in assessing the objectivity of the internal auditor?

15. Part of an auditor's process of establishing whether the preconditions for an audit are present involves obtaining management's acknowledgement of its responsibility for all of the following except:

16. Which of the following is correct regarding a compilation of financial statements engagement in accordance with the Statements on Standards for Accounting and Review Services (SSARS)?

17. During an audit, an auditor discovers a fraudulent expense reimbursement for a low-level manager. The auditor determines that this transaction is inconsequential and several similar transactions would not be material to the financial statements in the aggregate. Which of the following statements best describes the auditor's required response to the discovery?

18. In reporting under Government Auditing Standards, an auditor most likely would be required to communicate management's misappropriation of assets directly to a federal inspector general when the fraudulent activities are:

19. An auditor discovers that an account balance believed not to be materially misstated based on an audit sample was materially misstated based on the total population of the account balance. This is an example of which of the following sampling types of risks?

20. Automatic printed reports when errors are discovered by the system

21. TWD's Board of Directors is controlled by Mead, the majority stockholder, who also acts as the chief executive officer. The audit risk would:

22. Which of the following types of evidence would an auditor most likely examine to determine whether internal control activities are operating as designed?

23. Title IV of the Sarbanes-Oxley Act of 2002 requires which of the following?

24. If the business environment is experiencing a recession, the auditor most likely would focus increased attention on which of the following accounts?

25. What is the most likely source of the following statement?
'There were unreasonable delays by management in permitting the commencement of the audit and in providing needed information.'

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