Certified Public Accountant Professional Standards & Competencies 2

Question 1

Under AICPA rules, a CPA who discovers a material error in a previously issued audit report must first:

Accepted Answer

Notify the client and advise them to disclose the error to affected parties

Answer

AU-C Section 560 requires the auditor to notify management and those charged with governance so appropriate disclosure is made to parties relying on the report.

Question 2

Which GAAS standard requires the auditor to obtain sufficient appropriate audit evidence?

Accepted Answer

Fieldwork Standard — evidence

Answer

The fieldwork standard on evidence (AU-C Section 500) requires sufficient appropriate audit evidence to support the opinion.

Question 3

A CPA firm's quality control policies under SQCS No. 8 must address all of the following EXCEPT:

Accepted Answer

Client fee negotiations

Answer

SQCS No. 8 covers leadership, ethics, acceptance/continuance, human resources, engagement performance, and monitoring — not fee negotiations.

Question 4

The AICPA Code of Professional Conduct's 'objectivity' principle requires a CPA to:

Accepted Answer

Be free from conflicts of interest and avoid subordinating judgment to others

Answer

Objectivity prohibits conflicts of interest and requires CPAs to avoid subordinating their professional judgment to the interests of others.

Question 5

When a CPA performs a compilation engagement under AR-C Section 80, the compilation report must include a statement that the CPA:

Accepted Answer

Expresses no assurance on the financial statements

Answer

A compilation report explicitly states that the CPA does not express an opinion or provide any assurance on the financial statements.

Certified Public Accountant Practice Test

Certified Public Accountant Practice Test

Certified Public Accountant Professional Standards & Competencies 2