Most Recent AICPA CPA-Auditing Exam Dumps

Prepare for the AICPA CPA Auditing and Attestation exam with our extensive collection of questions and answers. These practice Q&A are updated according to the latest syllabus, providing you with the tools needed to review and test your knowledge.

QA4Exam focus on the latest syllabus and exam objectives, our practice Q&A are designed to help you identify key topics and solidify your understanding. By focusing on the core curriculum, These Questions & Answers helps you cover all the essential topics, ensuring you're well-prepared for every section of the exam. Each question comes with a detailed explanation, offering valuable insights and helping you to learn from your mistakes. Whether you're looking to assess your progress or dive deeper into complex topics, our updated Q&A will provide the support you need to confidently approach the AICPA CPA-Auditing exam and achieve success.

The questions for CPA-Auditing were last updated on Apr 21, 2026.

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Question No. 1

In an attest engagement, use of the accountant's report should be restricted to specified parties in all of the following situations, except:

AWhen the criteria used to evaluate the subject matter are appropriate for only a limited number of parties.

BWhen reporting on an assertion about the subject matter instead of reporting directly on the subject matter.

CWhen reporting directly on the subject matter and a written assertion has not been provided.

DWhen reporting on an agreed-upon procedures engagement.

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Correct Answer: B

Choice 'b' is correct. There is no requirement that the accountant's report be restricted to specified parties when reporting on an assertion about the subject matter instead of reporting directly on the subject matter.

Choice 'a' is incorrect, since use of the accountant's report should be restricted to specified parties when the criteria used to evaluate the subject matter are appropriate for only a limited number of parties.

Choice 'c' is incorrect, since use of the accountant's report should be restricted to specified parties when reporting directly on the subject matter and a written assertion has not been provided.

Choice 'd' is incorrect, since use of the accountant's report should be restricted to specified parties when reporting on an agreed-upon procedures engagement.

Question No. 2

Hill, CPA, has been retained to audit the financial statements of Monday Co. Monday's predecessor auditor was Post, CPA, who has been notified by Monday that Post's services have been terminated.

Under these circumstances, which party should initiate the communications between Hill and Post?

AHill, the successor auditor.

BPost, the predecessor auditor.

CMonday's controller or CFO.

DThe chairman of Monday's board of directors.
Explanation
Choice 'a' is correct. The initiative to communicate with the predecessor auditor rests with the successor auditor. Note, however, that the successor auditor must first receive permission from the client.
Choice 'b' is incorrect. The predecessor auditor should respond promptly and fully to reasonable inquiries. However, the predecessor is not responsible for initiating communications.
Choice 'c' is incorrect. The prospective client should authorize the predecessor to respond fully to the successor's inquiries. However, the client is not responsible for initiating communications.
Choice 'd' is incorrect. The prospective client should authorize the predecessor to respond fully to the successor's inquiries. However, the client is not responsible for initiating communications.

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Correct Answer: A

Question No. 3

An auditor testing long-term investments would ordinarily use analytical review as the primary audit procedure to ascertain the reasonableness of the:

AValuation of marketable equity securities.

BClassification of gains and losses on the disposal of securities.

CCompleteness of recorded investment income.

DExistence and ownership of investments.

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Correct Answer: C

Choice 'c' is correct. Analytical review is generally used to ascertain the reasonableness of investment income in relationship to the amount invested.

Choice 'a' is incorrect. Valuation would be verified using listed prices (NYSE, etc.).

Choice 'b' is incorrect. Classification of gains or losses would be evaluated based upon appropriate accounting principles.

Choice 'd' is incorrect. Existence and ownership is generally evaluated by inspection of securities, review of brokerage statements, or confirmation with an outside independent custodian.

Question No. 4

An enterprise engaged a CPA to audit its financial statements in accordance with Government Auditing Standards (the Yellow Book) because of the provisions of government grant funding agreements. Under these circumstances, the CPA is required to report on the enterprise's internal controls either in the report on the financial statements or in:

AThe report on the performance audit.

BThe notes to the financial statements.

CA letter to the government funding agency.

DA separate report.

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Correct Answer: D

Choice 'd' is correct. The report on the audit of the financial statements should describe the scope of the auditor's testing of compliance with laws and regulations and internal control over financial reporting, and should either present the results of those tests or refer to a separate report containing that information.

Choice 'a' is incorrect. The CPA was engaged to audit financial statements in accordance with the Yellow Book, not to perform a performance audit.

Choice 'b' is incorrect. The notes to the financial statements are a management representation and would not be used by the CPA to comply with requirements to either report or opine in conformity with Yellow Book requirements.

Choice 'c' is incorrect. Governmental Auditing Standards require that the auditor describe the scope of the auditor's testing of compliance with laws and regulations and internal control over financial reporting and present the results of those tests as part of their report or in a separate report, not simply in a letter to the funding agency.

Question No. 5

To obtain an understanding of a continuing client's business in planning an audit, an auditor most likely would:

APerform tests of details of transactions and balances.

BReview prior-year audit documentation and the permanent file for the client.

CRead specialized industry journals.

DReevaluate the client's internal control environment.
Explanation
Choice 'b' is correct. Knowledge of an entity's business is ordinarily obtained through experience with the entity or its industry and inquiry of personnel of the entity. Audit documentation from prior years may contain useful information about the nature of the business, its organizational structure, its operating characteristics, and transactions that may require special consideration.
Choice 'a' is incorrect. Tests of details of transactions and balances are not performed during the planning stage of an audit.
Choice 'c' is incorrect. Reading industry journals would provide information about the industry in which the entity operates, but reviewing prior-year audit documentation and the permanent file would provide a more thorough understanding of the specific client's business.
Choice 'd' is incorrect. The client's internal control is not reevaluated during the planning stage of an audit.

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Correct Answer: B

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