CPA Exam Questions & Answers 2026 (11–20)

Question 1

An auditor may express an opinion on an entity's accounts receivables balance even if the auditor has disclaimed an opinion on the financial statements taken as a whole provided the ________.

TheoryPractice · Accepted Answer

report on the accounts receivable is presented separately from the disclaimer of opinion on the financial statements. Such a report is considered a "specified elements, accounts, or items report" and should include the opinion on the accounts receivable separately from the disclaimer of opinion on the financial statement.  Reason for the disclaimer of opinion need to be provided. Distribution of such a report is not restricted to internal use only.  The auditor need not report on the current asset portion of the entity's balance sheet to issue such a report.

Question 2

Which of the following does not represent a quality control component?

TheoryPractice · Accepted Answer

Internal control.. Because internal control does not have a quality control component, "internal control" is the appropriate response. Monitoring, human resources, and acceptance of client relationships and specific engagements are all components of quality control. The leadership responsibilities for engagement performance, quality within the organization, and relevant ethical requirements are further parts of quality control.

Question 3

Auditors use the information collected while obtaining their understanding of the client and its environment to identify all of the following except:

TheoryPractice · Accepted Answer

year-end purchases. Auditors use the information collected while obtaining their understanding of the client and its environment to identify transaction classes, account balances, and disclosures that might be materially misstated. Assessing the risks of misstatement (the risk assessment) is performed both at the overall financial statement level and at the relevant assertion level and includes.

Question 4

There are special considerations for owners' equity. Little effort will be exerted in auditing the ________ of a continued client.

TheoryPractice · Accepted Answer

retained earnings. Little effort will be exerted in auditing the retained earnings of a continued client. The audit procedures for dividends will allow the auditor to verify the propriety of that debit to retained earnings. The entry to record the year's net income (loss) is readily available. Finally, the nature of any prior period adjustments is examined to determine whether they meet the criteria for an adjustment to retained earnings. Recall that the type of adjustment typically encountered is a correction of prior years' income.

Question 5

No deletions of audit documentation are permitted after the

TheoryPractice · Accepted Answer

Documentation completion date.. This is valid since audit documentation may not be erased beyond the documentation completion date, according to professional norms.

Question 6

When audited financial statements are presented in a client's document containing other information, the auditor should ________.

TheoryPractice · Accepted Answer

read the other information to determine that it is consistent with the audited financial statements. The auditor is required to read the other information to determine that it is consistent with the audited financial statements. No such inquiry, analytical procedures, or other substantive auditing procedures are required.  Unless the information seems incorrect or inconsistent with the audited financial statements, no emphasis-of-matter paragraph needs to be added to the auditor's report.

Question 7

The Code presents the relevant rules for those in business and related to the business the member is a part of, rather than public accounting context. Other members are those who are retired or unemployed. Examples of acts under the discreditable rule include all of the following except:

TheoryPractice · Accepted Answer

release of confidential information. To the contrary, inappropriate release of confidential information is an example of an act that is discreditable.  Other examples include solicitation or disclosure of CPA exam questions and answers; failure to file a tax return or to pay a tax liability; and inappropriate acts in promoting or marketing services or use of the CPA credential.

Question 8

An auditor's working papers serve mainly to ________.

TheoryPractice · Accepted Answer

provide the principal support for the auditor's report. The requirement is to identify a primary purpose of an auditor's working papers. AU-C 230 states that working papers serve mainly to provide the principal support for the auditor's report and to aid the auditor in the conduct and supervision of the audit.

Question 9

Samples to test internal control are intended to provide a basis for an auditor to conclude whether:

TheoryPractice · Accepted Answer

The control activities are operating effectively.. Samples to test internal control are intended to provide a basis for an auditor to conclude whether the control activities are operating effectively.

Choice "b" is incorrect. Tests of controls may provide evidence regarding the likelihood of misstatement, but they do not provide a basis for concluding whether the financial statements are materially misstated.

Choice "c" is incorrect. The risk of incorrect acceptance is an aspect of sampling risk related to substantive tests, not tests of controls.

Choice "d" is incorrect. Samples to test controls do not provide evidence regarding materiality levels for planning purposes.

Question 10

The IRS rejected a taxpayer’s return when the taxpayer attempted to e-file the return. When resubmitting the rejected return as a paper return, the taxpayer must file the return

TheoryPractice · Accepted Answer

By the due date for filing the return or 10 calendar days after the return was rejected. by the due date for filing the return or 10 calendar days after the return was rejected .

CPA Exam Questions & Answers 2026 (11–20)

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