CPA AA Audit & Insurance Online Training
CPA AA Online Training
The questions for AA were last updated at Apr 25,2025.
- Exam Code: AA
- Exam Name: Audit & Insurance
- Certification Provider: CPA
- Latest update: Apr 25,2025
New credit policies have been implemented to prevent entering any new sales order that would cause customers’ accounts receivable balance to exceed average sales for any two-month period in the prior twelve month period resulting in controlled collectability. After implementation there were decreased sales and slower order entries as reported from divisional sales management. Division management contends that these are a direct result of the new credit policy constraints.
Sales management’s data and information provides
- A . Feedback control data on the new credit policy.
- B . Irrelevant argumentative information.
- C . Evidence that the new credit policy is not meeting the stated corporate objective to control the collectability of new sales volume.
- D . A statistically valid conclusion about the impact on customer goodwill concerning the credit policy.
Mike Robin, ACA is identifying risk in the statement of Mohin Co as a part of his audit work.
Which of the following defines control risk for Mohin Co?
- A . The risk that the financial statements of Mohin Co are materially misstated prior to audit.
- B . The susceptibility of an assertion about a class of transaction, account balance or disclosure to a misstatement that could be material, either individually or when aggregated with other misstatements, before consideration of any related controls of Mohin Co.
- C . The risk that a misstatement that could occur in an assertion about a class of transaction, account balance or disclosure and that could be material, either individually or when aggregated with other misstatements, will not be prevented, or detected and corrected, on a timely basis by Mohin Co’s internal control.
- D . The risk that the procedures performed by Mike to reduce audit risk to an acceptably low level will not detect a misstatement that exists and that could be material, either individually or when aggregated with other misstatements.
A firm’s inventory consisted of 5,000 various types of stocks, 100 of which accounted for 75% of the total monetary value. The most recent regular quarterly manual count revealed that there was an unnecessary two years’ supply of the more expensive items.
The control that would best help to correct this oversupply problem is
- A . Use of a control total over the number of unique inventory items.
- B . Limit check on the total monetary value of the inventory.
- C . Use of authorising signatures on requisitions for inventory requested by production.
- D . Maintain perpetual inventory of the larger dollar value items in the inventory.
Pahari Robert has been appointed the auditor of Safe Haven which has a year end of 31 May. Safe Haven is a small registered charity based in a small town in Warshire. The organisation provides shelter for abandoned dogs and puppies with the aim of finding new homes for as many as possible.
Safe Haven also employs a number of paid employees. The shelter is managed by John and Jane Sheldon, who are husband and wife. Safe Haven has a high turnover of staff in the accounts department.
Which type of risk has been illustrated in Safe Haven?
- A . Inherent risk
- B . Control risk
- C . Detection risk
- D . Audit risk
When preparing audit documentation, the auditor of a smaller entity may find it helpful and efficient to record various aspects of the audit together in a single document, with cross-references to supporting working papers as appropriate. Examples of matters that may bedocumented together in the audit of a smaller entity include the understanding of the entity and its internal control, the overall audit strategy and audit plan, materiality, assessed risks, significant matters noted during the audit, and conclusions reached.
Which one of the following would not be included in the overall audit strategy?
- A . Details of economic factors and industry conditions
- B . The results of initial analytical procedures
- C . Confirmation of management’s responsibility for the financial statements
- D . Identification of specific audit risks
Latest AA Dumps Valid Version with 80 Q&As
Latest And Valid Q&A | Instant Download | Once Fail, Full Refund
