Certified Public Accountant Professional Standards & Competencies 3

Question 1

Which type of audit opinion is issued when financial statements contain a material but not pervasive misstatement?

Accepted Answer

Qualified opinion

Answer

A qualified opinion ('except for') is used when a misstatement or scope limitation is material but not pervasive enough to require an adverse or disclaimer.

Question 2

A CPA who simultaneously holds a financial interest in a client and audits that client violates which AICPA Rule?

Accepted Answer

Rule 101 — Independence

Answer

Rule 101 (ET Section 1.200) prohibits a CPA from having a direct financial interest in an attest client.

Question 3

The concept of 'professional skepticism' in auditing means the auditor should:

Accepted Answer

Maintain a questioning mind and critically assess audit evidence

Answer

Professional skepticism involves a questioning mind and critical assessment of evidence without assuming dishonesty or unquestioned honesty.

Question 4

Under PCAOB AS 2201, an auditor's report on internal control over financial reporting must be based on:

Accepted Answer

An integrated audit performed alongside the financial statement audit

Answer

AS 2201 requires an integrated audit of both ICFR and the financial statements for public companies subject to SOX Section 404(b).

Question 5

A CPA in public practice who prepares tax returns must comply with which standard when determining a return position?

Accepted Answer

Statements on Standards for Tax Services (SSTSs)

Answer

The AICPA's Statements on Standards for Tax Services govern tax return preparation and advice by CPA members.

Certified Public Accountant Practice Test

Certified Public Accountant Practice Test

Certified Public Accountant Professional Standards & Competencies 3