CPA Regulatory Compliance & Standards 2

Question 1

Under the Sarbanes-Oxley Act, how long must audit workpapers be retained by a registered public accounting firm?

Accepted Answer

7 years

Answer

SOX Section 802 requires audit workpapers to be retained for 7 years.

Question 2

Which body sets auditing standards for audits of non-public (private) companies in the United States?

Accepted Answer

AICPA Auditing Standards Board

Answer

The AICPA Auditing Standards Board issues Statements on Auditing Standards (SAS) for private company audits.

Question 3

A CPA discovers a material misstatement in a client's previously issued financial statements. Under AU-C Section 560, what is the primary required action?

Accepted Answer

Advise the client to restate and reissue the financial statements

Answer

AU-C 560 requires the auditor to advise the client to make appropriate disclosure and restate prior period financials when a material misstatement is discovered.

Question 4

Under PCAOB AS 2201, an auditor's report on internal control over financial reporting must be integrated with which other report?

Accepted Answer

The audit report on financial statements

Answer

AS 2201 requires the ICFR report to be integrated with the audit report on the financial statements for public companies.

Question 5

Which Treasury Circular governs the practice of CPAs, attorneys, and enrolled agents before the IRS?

Accepted Answer

Circular 230

Answer

Treasury Department Circular 230 regulates practitioners who practice before the IRS, including CPAs.

(CPA) Certified Practicing Accountant Practice Test

(CPA) Certified Practicing Accountant Practice Test

CPA Regulatory Compliance & Standards 2