Certified Public Accountant Quality Control & Assurance 5

Question 1

A PCAOB inspection report identifies a quality control criticism related to audit documentation. The registered firm's response should be submitted within:

Accepted Answer

60 days of the report's issuance

Answer

Firms have 60 days to respond to PCAOB inspection report criticisms and describe their remediation plans.

Question 2

Which of the following BEST illustrates a 'systemic' quality control deficiency versus an 'isolated' one?

Accepted Answer

Multiple engagement teams across different offices consistently failed to test IT general controls

Answer

A systemic deficiency affects multiple engagements or teams, suggesting a flaw in firm-wide policies or training, unlike an isolated lapse by one individual.

Question 3

Under SQCS No. 8, the 'engagement performance' element requires firms to establish policies for all of the following EXCEPT:

Accepted Answer

Setting audit fees for new clients

Answer

Fee-setting is a firm business decision, not a component of the engagement performance quality control element.

Question 4

A staff auditor disagrees with the engagement manager's conclusion on a going-concern matter. Under quality control standards, the staff auditor should:

Accepted Answer

Raise the disagreement through the firm's established consultation or differences-of-opinion procedures

Answer

Firms must have policies allowing personnel to escalate differences of opinion without fear of reprisal, ensuring significant disagreements are resolved properly.

Question 5

Which of the following would MOST likely be included in a CPA firm's annual quality control report issued to partners?

Accepted Answer

Summary of monitoring results, identified deficiencies, and corrective actions taken

Answer

The firm's annual quality control report to partners summarizes monitoring findings, deficiencies found, and actions taken to address them.

Certified Public Accountant Practice Test

Certified Public Accountant Practice Test

Certified Public Accountant Quality Control & Assurance 5