AUD Sample CPA Exam Questions

Weekly Review Quiz #496 – AUD: Internal Control – Transaction Cycles

Thank you for taking our Auditing and Attestation (AUD) review quiz. Check back again for five new sample FAR CPA questions to help you prepare for the exam.

Question 1
In using the work of a specialist, an auditor may refer to the specialist in the auditor’s report if, as a result of the specialist’s findings, the auditor 

  1. Desires to disclose the specialist’s findings, which imply that a more thorough audit was performed.
  2. Makes suggestions to management that are likely to improve the entity’s internal control.
  3. Corroborates another specialist’s findings that were consistent with management’s assertions.
  4. Adds an emphasis-of-matter paragraph to the auditor’s report to emphasize an unusually important subsequent event.

The correct answer is: D.
The specialist is only referred to when that report directly relates to a matter resulting in modification of the report—here an important subsequent event. It might also involve a case in which a specialist’s valuation differs from management’s valuation.


Question 2
An auditor is testing internal control procedures that are evidenced on an entity’s vouchers by matching random numbers with voucher numbers. If a random number matches the number of a voided voucher, that voucher ordinarily should be replaced by another voucher in the random sample if the voucher

  1. Constitutes a deviation.
  2. Has been properly voided.
  3. Cannot be located.
  4. Represents an immaterial dollar amount.

The correct answer is: B.
The requirement is to identify the correct statement with respect to treatment of a voided voucher that has been selected in a sample. Answer (b) is correct because the AICPA Audit Sampling Guide states that the auditor should obtain reasonable assurance that the voucher has been properly voided, and should then replace it with another voucher. Answer (a) is incorrect because the voided voucher is not normally considered to be a deviation. Answer (c) is incorrect because the auditor must obtain reasonable assurance that the misplaced voucher has been voided. Answer (d) is incorrect because the level of materiality normally does not directly affect the decision.

Question 3
When management prepares financial statements in conformity with generally accepted accounting principles, assertions are made about account balances and

Classes of transactions Disclosures

  1. Yes                      Yes
  2. Yes                      No
  3. No                       Yes
  4. No                       No

The correct answer is: A.
The professional standards identify and classify assertions for account balances, transaction classes, and disclosures.

Question 4
An independent auditor must have which of the following?

  1. A pre-existing and well-informed point of view with respect to the audit.
  2. Technical training that is adequate to meet the requirements of a professional.
  3. A background in many different disciplines.
  4. Experience in taxation that is sufficient to comply with generally accepted auditing standards.

The correct answer is: A.
GAAS requires auditors to have adequate technical training and proficiency in auditing.


Question 5
Prior to, or in conjunction with, the information-gathering procedures for an audit, audit team members should discuss the potential for material misstatement due to fraud. Which of the following best characterizes the mind-set that the audit team should maintain during this discussion?

  1. Presumptive.
  2. Judgmental.
  3. Criticizing.
  4. Questioning.

The correct answer is: D.
The auditors should maintain a questioning mind and exercise professional skepticism.

End of Quiz
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