CPA Exam Sample Questions and Answers
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With access to the highest-quality CPA Exam questions and answers, UWorld Roger CPA Review students master the most difficult exam topics. Our CPA Exam practice questions are meticulously designed by a team of acclaimed educators and practicing CPAs to help candidates understand why they’ve answered each question correctly or incorrectly. Continue on to see real CPA Exam sample questions from our revolutionary Qbank.
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Sample CPA Exam Questions
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The Auditing and Attestation (AUD) section of the CPA Exam tests your skills and knowledge of the entire auditing process. See if you can answer this Audit CPA Exam question on planning an Audit. Don’t forget to review the answer explanation to determine why your response was correct or incorrect.
In planning an audit, the auditor’s knowledge about the design of relevant internal control activities should be used to
During the planning phase, an auditor obtains an understanding of the entity and its environment through the performance of risk assessment procedures. These procedures enable the auditor to effectively assess the types of potential misstatements that could occur and the controls that should be in place to mitigate the risk of a material misstatement (RMM).
Required risk assessment procedures include AIIO:
- Analytical procedures (study of data comparisons and relationships) using high-level data
- Inquiries of management and others within the entity, including internal auditors
- Inspection of documents and records, such as authorization forms and procedures manuals
- Observation (watching the application of manual controls)
Understanding the design of relevant internal control activities is used to:
- Identify the types of potential misstatements (eg, errors, fraud)
- Consider factors that affect the RMM
- Design tests of controls and substantive procedures
(Choices B and D) Assessing and documenting the operational efficiency of internal control occur after the auditor obtains an understanding of the entity. The potential misstatements must be identified before conclusions can be drawn.
(Choice C) Auditors are expected to be alert for the possibility of fraud. They are not expected to determine whether controls have been circumvented by collusion. If it appears that controls were not effective, further testing would be designed to determine whether collusion occurred.
Things to remember:
An auditor obtains an understanding of an entity through the performance of risk assessment procedures. These procedures are designed to gather information to enable the auditor to effectively assess the types of potential misstatements that could occur and the controls that should be in place to mitigate such risks.
The Business Environment and Concepts (BEC) section of the CPA Exam covers a wide range of business concepts as well as a CPA’s professional responsibilities within the business environment. See if you can answer this BEC CPA Exam question on SOC reports. Don’t forget to review the answer explanation to determine why your response was correct or incorrect.
Which of the following reports most likely would provide assurance on internal controls over the confidentiality of client data at a service organization?
System and organization controls (SOC) reports provide assurance about a service organization’s internal controls. SOC 1 reports provide assurance about a service organization’s controls relevant to the user entity’s financial reporting.
SOC 2 reports, in contrast, provide assurance on the service organization’s controls over security, availability, processing integrity, confidentiality, and privacy of the user entity’s data. Generally, these reports are provided by the service organization to its clients.
The emphasis of SOC 2 reports is on the operational fitness of IT systems. These reports can play an important role in:
- Oversight of the organization
- Vendor management programs
- Internal corporate governance and risk management processes
- Regulatory oversight
Both SOC 1 and SOC 2 reports come in two types: Type 1 reports address only the accuracy of management’s description of the controls and whether those controls are suitably designed. Type 2 reports provide assurance about whether the controls are operating effectively.
Things to remember:
System and organization controls (SOC) 1 reports provide assurance about a service organization’s controls relevant to a user entity’s financial reporting. SOC 2 reports provide assurance about the controls over security, availability, processing integrity, confidentiality, and privacy of the user entity’s data. Type 1 reports address the accuracy of management’s description of controls and whether those controls are suitably designed. Type 2 reports provide assurance about whether the controls are operating effectively.
The Financial Accounting and Reporting (FAR) section of the CPA Exam covers the financial accounting aspect of the profession, and requires candidates to have a strong understanding of US GAAP. See if you can answer this FAR CPA Exam question on deferred tax. Don’t forget to review the answer explanation to determine why your response was correct or incorrect.
Rein, Inc. reported $40,000 as deferred tax assets and $53,000 as deferred tax liabilities at the beginning of Year 2. At the end of Year 2, Rein reported $58,000 as deferred tax assets and $65,000 as deferred tax liabilities. What should Rein report as deferred income tax expense or benefit at the end of Year 2?
The deferred income tax expense or benefit represents temporary differences between accounting and taxable income resulting from certain items being taxable or deductible on a tax return in a different period than reported on the income statement.
Some differences result in future taxable amounts, which require the recording of deferred tax liabilities (DTL) and create a deferred tax expense because future taxes will be owed. Others are future deductible amounts, resulting in deferred tax assets (DTA) that create deferred tax benefits because future taxes will be saved. The DTA and DTL are netted at year end and are reported either as a noncurrent asset or liability.
The deferred tax expense (or benefit) is the change in the net DTA or net DTL for the reporting period as follows:
- If net DTL increased or net DTA decreased, record an expense.
- If net DTA increased or net DTL decreased, record a benefit.
In this scenario, Rein, Inc.’s net DTL decreased during the year, which creates a deferred tax benefit of $6,000, as shown below (Choice A).
(Choices C and D) The $7,000 is the net DTL at the year end. The change in the net amount of DTA and DTL equals the deferred expense or benefit.
Things to remember:
The deferred tax expense (benefit) is the change in the net deferred tax asset (DTA) or net deferred tax liability (DTL) for the reporting period. Deferred tax expense results when there is a net DTL increase or net DTA decrease. A deferred tax benefit results when there is a net DTA increase or net DTL decrease.
The Regulation (REG) section of the CPA Exam tests CPA candidates’ knowledge and skill level primarily on federal taxation, then on business law, business ethics and professional and legal responsibilities. See if you can answer this REG CPA Exam question on involuntary bankruptcy. Don’t forget to review the thorough answer explanation to determine why your response was correct or incorrect.
An involuntary bankruptcy occurs when unsecured creditors file a petition to place a debtor in bankruptcy. The petition can be filed under either the liquidation provisions of Chapter 7 or the reorganization provisions of Chapter 11. Filing the bankruptcy petition stops all creditor collection efforts, including the enforcement of judgment liens against property in the bankruptcy estate.
Filing an involuntary petition is most important in a Chapter 7 bankruptcy, in which all the debtor’s secured and unsecured nonexempt property is placed in the bankruptcy estate for liquidation. The liquidation proceeds are used to satisfy creditor claims. If the judgment lien holder’s collection efforts were not stopped, the lien holder could seize the property, removing it from the bankruptcy estate. This would mean fewer assets to liquidate and fewer proceeds to distribute among the other creditors.
(Choice A) Exempt property is not part of the bankruptcy estate. However, liens on exempt property can be discharged (terminated).
(Choice B) Filing the petition does not terminate all security interests in the property in the bankruptcy estate; however, they will eventually be terminated when the assets are sold in the liquidation.
(Choice C) Debtors can still incur new debt while in bankruptcy. This often occurs in Chapter 11 bankruptcies, in which the debtor still operates a business during the bankruptcy and needs to incur debt for ongoing operations.
FAQs
How many questions are on the CPA Exam?
In total, there are 307 CPA Exam questions across the four-parts of the CPA exam. Each exam part varies in question quantity and question type–which includes multiple choice questions, task-based simulations, and written communication questions (which are only on the BEC Exam).
How many questions are on the AUDIT CPA Exam?
The AUD Exam has a total of 80 CPA Exam questions. This includes 72 multiple choice questions and eight task-based simulations.
How many questions are on the BEC CPA Exam?
The BEC Exam has a total of 69 CPA Exam questions. This includes 62 multiple choice questions, four task-based simulations, and three written communication questions.
How many questions are on the FAR CPA Exam?
The FAR Exam has a total of 74 CPA Exam questions. This includes 66 multiple-choice questions and eight task-based simulations.
How many questions are on the REG CPA Exam?
The REG Exam has a total of 84 CPA Exam questions. This includes 76 multiple choice questions and eight task-based simulations.
Does the CPA Exam reuse questions?
While the CPA Exam is constantly changing, there is evidence to support that the same questions could be used multiple times. The AICPA spends extensive time perfecting and then high-guarding these questions; it would not make sense for them to implement them only once. Therefore, if you have to repeat a section of the CPA Exam, do not be surprised if you encounter the same questions.
Do UWorld Roger CPA Review program questions look like AICPA exam questions?
Yes! UWorld CPA Exam sample questions provide an exam-like experience, mirroring the same look and format that you will encounter at the Prometric Testing Center on exam day.
What are the good and bad CPA exam questions?
Not all CPA Exam questions are equal. Good CPA Exam practice questions are meticulously aligned with the AICPA blueprints, ensuring you can test your skills and knowledge appropriately. At UWorld Roger CPA Review, we also know that the most effective questions include clear and concise answer explanations that ensure you fully understand why you answered a question correctly or incorrectly. Conversely, bad CPA Exam questions do not precisely follow the AICPA question format, content, and skill levels tested. These questions also include subpar answer explanations that lack substance and/or leave students more confused than when they started.
What does it take to develop a good CPA Exam Question at UWorld Roger CPA Review?
Our CPA Exam practice questions are developed by an expansive team of acclaimed accounting educators and practicing CPAs. Each question undergoes a meticulous 17-step development process and is peer-reviewed and revised multiple times before publication. This process is well-tuned and proven, focusing on quality and depth over quantity.
What is the best CPA test bank?
UWorld’s CPA practice questions constitute the most effective question bank in CPA Exam preparation. With a focus on quality over quantity, each question is meticulously designed to ensure you master the concepts and fully understand why each answer explanation is correct or incorrect.
What type of questions are on the CPA Exam?
The CPA Exam has three main question types:
- Multiple-choice questions (MCQs)
- Task-Based Simulations (TBSs)
- Written Communications (WCs) found only on the BEC Exam.
The four main sections of the CPA Exam include varying quantities and arrangements of the CPA Exam questions, distributed over multiple testlets.
Are all questions scored on the CPA Exam?
Each exam is broken down into blocks called testlets. Each testlet contains operational and pretest questions. Operational questions are the ones that are scored, while pretest questions are not scored. You cannot tell the difference between pretest or operational questions. The reason the AICPA does this is to test the CPA Exam questions prior to making them count towards your score. This is a common practice in high-stakes exams.
How many Questions do you need to practice?
There is a common misunderstanding that the more questions you practice, the better. This isn’t true. The key to passing the CPA Exam is practicing from only high-quality questions, mapped to the AICPA blueprints and comprehensive answer explanations to learn why you were correct or incorrect. Other review courses boast giant question banks, but they include duplicate questions, outdated information, or incomplete answer explanations.
Read more about the CPA Exam
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Learn all about the five-testlet exam structure, the types of CPA questions you will encounter, and an overview of the content covered on the four parts of the CPA Exam.
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