Exam Details

  • Exam Code
    :CPA-TEST
  • Exam Name
    :Certified Public Accountant Test: Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, Regulation
  • Certification
    :AICPA Certifications
  • Vendor
    :AICPA
  • Total Questions
    :1241 Q&As
  • Last Updated
    :Jun 30, 2025

AICPA AICPA Certifications CPA-TEST Questions & Answers

  • Question 901:

    When auditing prepaid insurance, an auditor discovers that the original insurance policy on plant equipment is not available for inspection. The policy's absence most likely indicates the possibility of a (an):

    A. Insurance premium due but not recorded.

    B. Deficiency in the coinsurance provision.

    C. Lien on the plant equipment.

    D. Understatement of insurance expense.

  • Question 902:

    Which of the following controls is most likely to prevent the improper disposition of equipment?

    A. A separation of duties between those authorized to dispose of equipment and those authorized to approve removal work orders.

    B. The use of serial numbers to identify equipment that could be sold.

    C. Periodic comparison of removal work orders to authorizing documentation.

    D. A periodic analysis of the scrap sales and the repairs and maintenance accounts.

  • Question 903:

    Property acquisitions that are misclassified as maintenance expense would most likely be detected by an internal accounting control system that provides for:

    A. Investigation of variances within a formal budgeting system.

    B. Review and approval of the monthly depreciation entry by the plant supervisor.

    C. Segregation of duties of employees in the accounts payable department.

    D. Examination by the internal auditor of vendor invoices and canceled checks for property acquisitions.

  • Question 904:

    A client has a large and active investment portfolio that is kept in a bank safe deposit box. If the auditor is unable to count the securities at the balance sheet date, the auditor most likely will:

    A. Request the bank to confirm to the auditor the contents of the safe deposit box at the balance sheet date.

    B. Examine supporting evidence for transactions occurring during the year.

    C. Count the securities at a subsequent date and confirm with the bank whether securities were added or removed since the balance sheet date.

    D. Request the client to have the bank seal the safe deposit box until the auditor can count the securities at a subsequent date.

  • Question 905:

    Which of the following internal controls would an entity most likely use to assist in satisfying the completeness assertion related to long-term investments?

    A. Senior management verifies that securities in the bank safe deposit box are registered in the entity's name.

    B. The internal auditor compares the securities in the bank safe deposit box with recorded investments.

    C. The treasurer vouches the acquisition of securities by comparing brokers' advices with canceled checks.

    D. The controller compares the current market prices of recorded investments with the brokers' advices on file.

  • Question 906:

    In testing long-term investments, an auditor ordinarily would use analytical procedures to ascertain the reasonableness of the:

    A. Completeness of recorded investment income.

    B. Classification between balance sheet portfolios.

    C. Valuation of marketable equity securities.

    D. Existence of unrealized gains or losses in the portfolio.

  • Question 907:

    Which of the following controls most likely would give the greatest assurance that securities held as investments are safeguarded?

    A. There is no access to securities between the year-end and the date of the auditor's security count.

    B. Proceeds from the sale of investments are received by an employee who does not have access to securities.

    C. Investment acquisitions are authorized by a member of the Board of Directors before execution.

    D. Access to securities requires the signatures and presence of two designated officials.

  • Question 908:

    Which of the following controls would an entity most likely use in safeguarding against the loss of marketable securities?

    A. An independent trust company that has no direct contact with the employees who have recordkeeping responsibilities has possession of the securities.

    B. The internal auditor verifies the marketable securities in the entity's safe each year on the balance sheet date.

    C. The independent auditor traces all purchases and sales of marketable securities through the subsidiary ledgers to the general ledger.

    D. A designated member of the board of directors controls the securities in a bank safe-deposit box.

  • Question 909:

    To satisfy the valuation assertion when auditing an investment accounted for by the equity method, an auditor most likely would:

    A. Inspect the stock certificates evidencing the investment.

    B. Examine the audited financial statements of the investee company.

    C. Review the broker's advice or canceled check for the investment's acquisition.

    D. Obtain market quotations from financial newspapers or periodicals.

  • Question 910:

    Which of the following controls would be most effective in assuring that the proper custody of assets in the investing cycle is maintained?

    A. Direct access to securities in the safety deposit box is limited to only one corporate officer.

    B. Personnel who post investment transactions to the general ledger are not permitted to update the investment subsidiary ledger.

    C. The purchase and sale of investments are executed on the specific authorization of the board of directors.

    D. The recorded balances in the investment subsidiary ledger are periodically compared with the contents of the safety deposit box by independent personnel.

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