Auditing and Assurance Training Cheat Sheet 2026

The 30 highest-yield Auditing and Assurance Training facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which professional standard governs the auditor's responsibility for planning under AICPA standards? → AU-C Section 300
2. The AICPA's 'conceptual framework' approach for independence requires CPAs to evaluate threats to independence and apply: → Safeguards sufficient to eliminate or reduce threats to an acceptable level
3. The Sarbanes-Oxley Act of 2002 established the PCAOB with authority to oversee: → Auditors of public companies registered with the SEC
4. When assessing fraud risk, AU-C Section 240 requires the audit team to specifically consider the risk of: → Management override of controls
5. Residual risk is best defined as the risk that remains after: → Management has applied controls to mitigate inherent risk
6. The auditor's responsibility for detecting material misstatements arising from fraud is: → The same as for errors — both require the same level of skepticism and procedures
7. Which type of assurance engagement provides a lower level of assurance than an audit? → Review engagement
8. When an auditor is engaged to perform an examination of prospective financial information, the level of assurance provided is: → Reasonable (positive) assurance
9. If an auditor discovers a material misstatement after the audit report has been issued and the financial statements have been released, the auditor should: → Notify the client that the financial statements need revision
10. Audit sampling is used because it allows the auditor to: → Draw conclusions about an entire population by examining only a portion of it
11. When auditing the allowance for doubtful accounts, the assertion of greatest concern is typically: → Valuation
12. The most frequent reason for conducting an audit of historical financial statements is to check if the → None of these choices
13. IT general controls (ITGCs) are important because weaknesses in them can: → Undermine the reliability of all automated application controls
14. An auditor obtains an understanding of the entity and its environment primarily to: → Identify and assess risks of material misstatement
15. In an agreed-upon procedures engagement, the report is restricted to: → Specified parties who agreed to the procedures
16. Before the end of his tenure, a business auditor may be dismissed by → Shareholders
17. Physical inspection of inventory by the auditor is an example of which type of audit evidence procedure? → Inspection of tangible assets
18. What is the primary purpose of a risk assessment in an audit engagement? → To identify and evaluate risks of material misstatement
19. Revenue recognition under ASC 606 requires an auditor to evaluate whether management correctly applied the five-step model. What is Step 1? → Identify the contract with a customer
20. Which of the following would most likely represent a 'self-review' threat to auditor independence? → The auditor prepares the financial statements and then audits them
21. Which of the following best illustrates the 'completeness' assertion for accounts payable? → Searching for unrecorded liabilities by reviewing disbursements after year-end
22. Which of the following is a 'modification' to the auditor's opinion? → Qualified, adverse, or disclaimer of opinion
23. The Companies Act of 2009, Section 143, addresses ___. → Powers and rights of an auditor
24. The Share Premium Account line item on the Balance Sheet should read → Reserves & surplus
25. Rotating the lead engagement partner every how many years is required under PCAOB independence rules for public company audits? → 5 years
26. Non-audit services provided by an audit firm to its SEC audit client are restricted under the Sarbanes-Oxley Act. Which of the following services is PROHIBITED? → Bookkeeping services for the audit client
27. Which financial statement assertion is being tested when an auditor verifies that all fixed assets on the books actually exist through physical inspection? → Existence
28. An 'emphasis-of-matter' paragraph in an audit report is used to: → Draw attention to a matter appropriately presented in the financials
29. Analytical procedures used as substantive tests are most effective when the auditor expects: → Predictable relationships between data and a low risk of material misstatement
30. The auditor should ensure that the amount received for the premium on the issuance of shares is indicated in . → Share Premium account