CPA Exam Blueprints 2025 PDF

Uniform CPA Examination ® Blueprints Approved by the Board of Examiners American Institute of CPAs Sept. 12, 2024 Effective date: January 2025 Uniform CPA Examination Blueprints Table of Contents 2 Introduction: Uniform CPA Examination Blueprints BAR1 Discipline Exa...

Uniform CPA Examination ® Blueprints Approved by the Board of Examiners American Institute of CPAs Sept. 12, 2024 Effective date: January 2025 Uniform CPA Examination Blueprints Table of Contents 2 Introduction: Uniform CPA Examination Blueprints BAR1 Discipline Examination Section – Business Analysis and Reporting (BAR) AUD1 Core Examination Section – Auditing and Attestation (AUD) BAR2 Section Introduction BAR6 Summary Blueprint AUD2 Section Introduction BAR7 Area I – Business Analysis AUD6 Summary Blueprint BAR11 Area II – Technical Accounting and Reporting AUD7 Area I – Ethics, Professional Responsibilities BAR15 Area III – State and Local Governments and General Principles AUD11 Area II – Assessing Risk and Developing a Planned ISC1 Discipline Examination Section – Information Systems Response and Controls (ISC) AUD17 Area III – Performing Further Procedures and ISC2 Section Introduction Obtaining Evidence ISC6 Summary Blueprint AUD22 Area IV – Forming Conclusions and Reporting ISC7 Area I – Information Systems and Data Management FAR1 Core Examination Section – Financial Accounting ISC10 Area II – Security, Confidentiality and Privacy and Reporting (FAR) ISC14 Area III – Considerations for System and Organization FAR2 Section Introduction Controls (SOC) Engagements FAR6 Summary Blueprint TCP1 Discipline Examination Section – Tax Compliance FAR7 Area I – Financial Reporting and Planning (TCP) FAR12 Area II – Select Balance Sheet Accounts TCP2 Section Introduction FAR16 Area III – Select Transactions TCP5 Summary Blueprint TCP6 Area I – Tax Compliance and Planning for Individuals REG1 Core Examination Section – Taxation and Regulation (REG) and Personal Financial Planning REG2 Section Introduction TCP9 Area II – Entity Tax Compliance REG5 Summary Blueprint TCP14 Area III – Entity Tax Planning REG6 Area I – Ethics, Professional Responsibilities TCP16 Area IV – Property Transactions (disposition of assets) and Federal Tax Procedures REG8 Area II – Business Law REG11 Area III – Federal Taxation of Property Transactions REG12 Area IV – Federal Taxation of Individuals REG15 Area V – Federal Taxation of Entities (including tax preparation) Uniform CPA Examination Blueprints 1 Introduction Uniform CPA Examination Blueprints The CPA licensure model requires all candidates to pass three Core exam The following table presents the scoring weight of MCQs and TBSs for each Core sections and one Discipline exam section of a candidate’s choosing. The Uniform and Discipline Exam section. CPA Examination (the Exam) has been designed accordingly as reflected in the Exam Blueprints. The Core exam sections assess the knowledge and skills that Score Weighting all newly licensed CPAs (nlCPAs) need in their role to protect the public interest. Multiple-Choice Tasked-Based The Discipline exam sections assess the knowledge and skills in the respective Section Questions (MCQs) Simulations (TBSs) Discipline domain applicable to nlCPAs in their role to protect the public interest. AUD – Core 50% 50% The three Core exam sections, each four hours long, are: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR) and Taxation and Regulation FAR – Core 50% 50% (REG). The three Discipline exam sections, each four hours long, are: Business REG – Core 50% 50% Analysis and Reporting (BAR), Information Systems and Controls (ISC) and Tax BAR – Discipline 50% 50% Compliance and Planning (TCP). ISC – Discipline 60% 40% The table below presents the design of the Exam by Core and Discipline section, TCP – Discipline 50% 50% section time and question type. The AICPA adopted a skill framework for the Exam based on the revised Bloom’s Multiple-Choice Tasked-Based Taxonomy of Educational Objectives1. Bloom’s Taxonomy classifies a continuum of Section Section Time Questions (MCQs) Simulations (TBSs) skills that students can be expected to learn and demonstrate. AUD – Core 4 hours 78 7 Each Exam section consists of five parts that we call testlets. The first two testlets are FAR – Core 4 hours 50 7 comprised of MCQs. The next three testlets contain the TBSs. REG – Core 4 hours 72 8 Testlet 1 Testlet 2 Testlet 3 Testlet 4 Testlet 5 Section BAR – Discipline 4 hours 50 7 (MCQ) (MCQ) (TBS) (TBS) (TBS) AUD – Core 39 39 2 3 2 ISC – Discipline 4 hours 82 6 FAR – Core 25 25 2 3 2 TCP – Discipline 4 hours 68 7 REG – Core 36 36 2 3 3 BAR – Discipline 25 25 2 3 2 ISC – Discipline 41 41 1 3 2 TCP – Discipline 34 34 2 3 2 1  evised taxonomy see Anderson, L.W. (Ed.), Krathwohl, D.R. (Ed.), Airasian, P.W., Cruikshank, K.A., Mayer, R.E., Pintrich, P.R., Raths, J., & Wittrock, M.C. (2001). A taxonomy for learning, teaching, and assessing: A revision of Bloom’s Taxonomy of Educational Objectives R (Complete Edition). New York: Longman. For original taxonomy see Bloom, B.S. (Ed.), Engelhart, M.D., Furst, E.J., Hill, W.H., & Krathwohl, D.R. (1956). Taxonomy of educational objectives: The classification of educational goals. Handbook 1: Cognitive domain. New York: David McKay. Uniform CPA Examination Blueprints 2 Introduction Uniform CPA Examination Blueprints (continued) Representative tasks that are critical to an nlCPA’s role in protecting the public Each section of the Exam has a section introduction and a corresponding interest have been identified. The representative tasks combine both the section blueprint. applicable content knowledge and skills required in the context of the work of The section introduction outlines the scope of the section, the content an nlCPA. Based on the nature of a task, one of four skill levels, derived from the organization and tasks, the content allocation, the overview of content revised Bloom’s Taxonomy, is assigned to each of the tasks, as follows:: areas, section assumptions, the skill allocation and a listing of the section’s applicable reference literature. Skill Levels The section blueprint outlines the content to be tested, the associated skill The examination or assessment of problems, Evaluation level to be tested and representative tasks an nlCPA would likely encounter. The and use of judgment to draw conclusions. blueprints are organized by content AREA, content GROUP and content TOPIC. The examination and study of the interrelationships Each topic includes one or more representative TASKS that an nlCPA may be Analysis of separate areas in order to identify causes and find expected to complete. evidence to support inferences. The purpose of the blueprint is to: The use or demonstration of knowledge, concepts Application or techniques. D  ocument the minimum level of knowledge and skills necessary for initial licensure. Remembering The perception and comprehension of the significance and Understanding of an area utilizing knowledge gained. A  ssist candidates in preparing for the Exam by outlining the knowledge and skills that may be tested. The skill levels to be assessed on each Core and Discipline section of the Exam A  pprise educators about the knowledge and skills candidates will need are included in the table below. to function as nlCPAs. Remembering and Guide the development of Exam questions. Section Application Analysis Evaluation Understanding AUD – Core 30–40% 30–40% 15–25% 5–15% The tasks in the blueprints are representative and are not intended to be (nor should they be viewed as) an all-inclusive list of tasks that may be tested FAR – Core 5–15% 45–55% 35–45% – on the Exam. The number of tasks associated with a particular content group or REG – Core 25–35% 35–45% 25–35% – topic is not indicative of the extent such content group, topic or related skill level will be assessed on the Exam. BAR – Discipline 10–20% 45–55% 30–40% – ISC – Discipline 55–65% 20–30% 10–20% – TCP – Discipline 5–15% 55–65% 25–35% – Uniform CPA Examination Blueprints 3 Uniform CPA Examination Auditing and Attestation (AUD) Blueprint Section Introduction Auditing and Attestation The Auditing and Attestation (AUD) section of the Uniform CPA Examination review services standards) to complete a range of tasks including identifying (the Exam) tests the knowledge and skills that nlCPAs must demonstrate when issues, analyzing facts and determining appropriate responses. performing the following engagements: A list of reference materials relevant to the AUD section of the Exam is included A  udit engagements include financial statement audits, compliance audits, under References at the conclusion of this introduction. audits of internal control integrated with an audit of financial statements, audits of entities receiving federal awards or grants and audits of financial statements Content organization and tasks of employee benefit plans subject to the Employee Retirement Income Security The AUD section blueprint is organized by content AREA, content GROUP Act of 1974 (ERISA). Audits include issuer entities subject to the requirements and content TOPIC. Each topic includes one or more representative TASKS set forth by the Public Company Accounting Oversight Board (PCAOB), that an nlCPA may be expected to complete when performing various types nonissuer entities subject to the requirements set forth by the American of engagements. Institute of CPA’s (AICPA) Auditing Standards Board or governmental entities The tasks in the blueprint are representative. They are not intended to be subject to the requirements of the U.S. Government Accountability Office (GAO) (nor should they be viewed as) an all-inclusive list of tasks that may be tested or the Office of Management and Budget (OMB). in the AUD section of the Exam. Lists or examples included within the text of Attestation engagements include assertion-based examinations, direct a representative task beginning with the word “including” are not intended to examinations and review or agreed-upon procedures engagements that are be exhaustive. Within some representative tasks are parenthetical lists. If a subject to the requirements set forth by the AICPA’s Auditing Standards Board. parenthetical list begins with “e.g.”, this is not intended to be an exhaustive list but rather examples of the types of content that could be assessed. Parenthetical lists A  ccounting and review service engagements include preparation, compilation that do not include “e.g.” are intended to be an exhaustive list of the content to be and review engagements that are subject to the requirements set forth by the assessed with respect to that representative task. AICPA’s Accounting and Review Services Committee. Content allocation The assessment will focus on an nlCPA’s role in planning, risk assessment, The following table summarizes the content areas and the allocation of content performing procedures, obtaining evidence and reporting for these engagement tested in the AUD section of the Exam: types. The assessment will incorporate: D  ata and technology concepts with a focus on understanding how data is Content area Allocation structured and flows through underlying systems, verifying the completeness and accuracy of source data and using the outputs of data analytic techniques Area I Ethics, Professional Responsibilities and General Principles 15–25% to assist in risk assessment or to complete planned procedures. Area II Assessing Risk and Developing a Planned Response 25–35% P  rofessional skepticism and professional judgment with a focus on the critical assessment of evidence and the need to apply knowledge and experience to Area III Performing Further Procedures and Obtaining Evidence 30–40% make informed decisions. Area IV Forming Conclusions and Reporting 10–20% A  pplied research with a focus on reviewing and using excerpts of source materials (e.g., auditing standards, attestation standards, accounting and Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD2 Section Introduction Auditing and Attestation (continued) Overview of content areas SOC 1® reports as they affect the audit of user-entity financial statements. Area I of the AUD section blueprint covers ethics, professional responsibilities and Materiality including performance materiality or tolerable misstatement. general principles, including the following: A  ssessing and responding to risks of material misstatement, whether E  thics and independence including understanding and applying the AICPA due to fraud or error. Code of Conduct and the ethical and independence requirements of the U.S. Securities and Exchange Commission (SEC), PCAOB, GAO and Department P  lanning for and using the work of others including management’s specialists of Labor (DOL). and auditor’s specialists. P  rofessional skepticism including the critical assessment of evidence and the S  pecific areas of engagement risk including compliance with laws and need to apply knowledge and experience to make informed decisions. regulations, accounting estimates, related parties and requirements for single audits in accordance with the Uniform Guidance for Single Audits. Nature, scope and terms of engagements including engagement preconditions. R  equirements for engagement documentation and communication with To the extent applicable, the audits of financial statements of employee benefit management or those charged with governance. plans subject to ERISA are eligible for testing in each group and topic in this Area. U  nderstanding of audit and assurance quality on an engagement and Area III of the AUD section blueprint covers performing procedures and obtaining responsibilities within a firm. evidence. The Area includes the following: To the extent applicable, the audits of financial statements of employee benefit U  se of data and information including requesting, preparing and transforming plans subject to ERISA are eligible for testing in each group and topic in this Area. data, reliability of data and information and data analytics. S  ufficient appropriate evidence including sources of evidence and concluding Area II of the AUD section blueprint covers planning and risk assessment and on whether evidence obtained achieves the engagement’s planned objectives. design of procedures responsive to identified risks. The Area includes the following: S  ampling techniques including appropriate populations, sample size, Engagement strategy and engagement planning. stratification and extrapolation of results. Internal and external factors related to understanding an entity and its P  erforming procedures to obtain evidence including tests of controls, tests of environment including basic economic concepts such as supply and details, analytical procedures and external confirmations. demand and business cycles. S  pecific matters that require special audit consideration such as accounting U  nderstanding an entity’s control environment and business processes including estimates, investments in securities, inventory, litigation, claims and an understanding of the COSO Internal Control – Integrated Framework, assessments, going-concern and testing transactions related to federal awards entity-level controls and the design of internal controls, IT environment and related during a single audit. IT general controls. The IT environment consists of an entity’s IT infrastructure, applications, processes to manage access to the IT environment and program M  isstatements and internal control deficiencies including preparing a summary change control, including personnel responsible for those processes. of misstatements and determining their effect on the financial statements and the nature, timing and extent of procedures. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD3 Section Introduction Auditing and Attestation (continued) Written representations requested from management. To the extent that there are different requirements for an entity under audit or review, the question will include an explicit reference to the entity type S  ubsequent events including identification of subsequent events and the impact (issuer or nonissuer). to an entity’s financial statements and disclosures. Questions may refer to an audit engagement by including phrases such as To the extent applicable, the audits of financial statements of employee benefit “an audit of a nonissuer” or “an audit of an issuer”. Questions will refer to other plans subject to ERISA are eligible for testing in each group and topic in this Area. types of engagements by including phrases such as “examination of pro forma Area IV of the AUD section blueprint covers engagement reporting. The Area financial information”, “review engagement”, “interim review”, “compilation includes the following: engagement”, etc. The use of the terms “auditor”, “accountant” or “practitioner” will also be used to further identify engagement types and applicable professional R  eporting on auditing and attestation engagements including factors to standards. Candidates should be mindful of the engagement type when consider when forming an opinion, types of opinions and the appropriate answering a question. form and content of a report. Skill allocation Considerations for performing preparation engagements. The Exam applies a skill framework based on the revised Bloom’s Taxonomy C  onsiderations for reporting on compilation and review engagements, including of Educational Objectives2. Bloom’s Taxonomy classifies a continuum of skills the appropriate form and content of a report. depicted in the table below: C  onsiderations for reporting on compliance aspects as part of an audit Skill Levels engagement or an attestation engagement related to compliance with a specific requirement or rule. The examination or assessment of problems, and use Evaluation of judgment to draw conclusions. O  ther reporting considerations when performing engagements, including consistency, other information, review of interim financial information, The examination and study of the interrelationships Analysis of separate areas in order to identify causes and find supplementary information, special-purpose frameworks and additional evidence to support inferences. reporting requirements under GAO Government Auditing Standards. The use or demonstration of knowledge, concepts Section assumptions Application or techniques. The AUD section of the Exam includes multiple-choice questions and task-based simulations. When completing multiple-choice questions and Remembering The perception and comprehension of the significance task-based simulations in the AUD section of the Exam, candidates should and Understanding of an area utilizing knowledge gained. be aware of the entity type and engagement type presented in the question. 2  evised taxonomy see Anderson, L.W. (Ed.), Krathwohl, D.R. (Ed.), Airasian, P.W., Cruikshank, K.A., Mayer, R.E., Pintrich, P.R., Raths, J., & Wittrock, M.C. (2001). A taxonomy for learning, teaching, and assessing: A revision of Bloom’s Taxonomy of Educational Objectives R (Complete Edition). New York: Longman. For original taxonomy see Bloom, B.S. (Ed.), Engelhart, M.D., Furst, E.J., Hill, W.H., & Krathwohl, D.R. (1956). Taxonomy of educational objectives: The classification of educational goals. Handbook 1: Cognitive domain. New York: David McKay. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD4 Section Introduction Auditing and Attestation (continued) The AUD section of the Exam assesses content at all of the skill levels of Bloom’s AICPA Statements on Auditing Standards and Related Auditing Interpretations Taxonomy as described below: P  CAOB Auditing Standards (SEC approved), Auditing Interpretations and Ethics R  emembering and Understanding is mainly concentrated in Area I and Area IV. and Independence Rules Area I contains much of the general audit knowledge that is required for nlCPAs. U.S. GAO Government Auditing Standards In Area IV, many of the tasks relate to reporting and are driven by templates and illustrative examples. Single Audit Act, as amended A  pplication is tested in all four areas of the AUD section. Application tasks focus OMB Audit Requirements for Federal Awards (2 CFR 200) on general topics such as professional responsibilities and documentation, and the day-to-day tasks that nlCPAs perform, using standardized application tools AICPA Statements on Quality Control Standards such as audit programs and sampling techniques. A  ICPA Statements on Standards for Accounting and Review Services A  nalysis and Evaluation skills, tested in Area II and Area III, involve tasks that and Related Accounting and Review Services Interpretations require a higher level of analysis and interpretation. These tasks, such as A  ICPA Statements on Standards for Attestation Engagements concluding on sufficiency and appropriateness of evidence, require nlCPAs to and Interpretations apply professional skepticism and judgment. AICPA Audit and Accounting Guides The representative tasks combine both the applicable content knowledge and AICPA Code of Professional Conduct the skills required in the context of the work that an nlCPA would reasonably be expected to perform. Title III and Title IV of the Sarbanes-Oxley Act of 2002 References – Auditing and Attestation U .S. DOL Interpretive bulletins relating to guidelines on independence of The References detailed below are the sources of the subject matter eligible for accountant retained by Employee Benefit Plan (29 CFR 2509.75-9) assessment in the AUD section, to the extent that the subject matter is included U.S. SEC Independence Rules in the blueprint’s content areas, groups and topics. Further, the assessment of the subject matter described in a representative task that identifies an organization, T  he Committee of Sponsoring Organizations of the Treadway Commission publication, law, regulation, standard or framework is limited to the specific (COSO): Internal Control — Integrated Framework sections of the References detailed below. Similarly, subject matter identified in a representative task and related subject matter is eligible for assessment to the C  urrent textbooks on auditing, attestation services, economics and ethics extent it is included in the References detailed below. The subject matter eligible and independence for assessment is limited to the References detailed below and does not extend to links or references within these References to other sources. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD5 Auditing and Attestation (AUD) Summary Blueprint Content area allocation Weight I. Ethics, Professional Responsibilities and General Principles 15–25% II. Assessing Risk and Developing a Planned Response 25–35% III. Performing Further Procedures and Obtaining Evidence 30–40% IV. Forming Conclusions and Reporting 10–20% Skill allocation Weight Evaluation 5–15% Analysis 15–25% Application 30–40% Remembering and Understanding 30–40% The following pages include the detailed blueprints that define the areas, groups, topics and representative tasks for the AUD section. It is important to note that the number of representative tasks associated with a particular content group or topic is not indicative of the extent to which such content group, topic or related skill level will be assessed on the Exam (i.e., more numerous tasks in a particular group, topic or skill compared to another should not infer more content weight assigned to that group, topic or skill). Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD6 Auditing and Attestation (AUD) Area I – Ethics, Professional Responsibilities and General Principles (15–25%) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding A. Ethics, independence and professional responsibilities 1. A  ICPA Code of Understand the principles, rules and interpretations included in the AICPA Code Professional Conduct of Professional Conduct. Apply the principles, rules and interpretations included in the AICPA Code of Professional Conduct to situations (e.g., maintaining integrity and objectivity and compliance with standards, maintaining the confidentiality of client information when using automated or third-party tools and techniques including artificial intelligence). Apply the Conceptual Framework for Members in Public Practice and Members in Business included in the AICPA Code of Professional Conduct to situations that could present threats to compliance with the rules included in the Code. Apply the Conceptual Framework for Independence included in the AICPA Code of Professional Conduct to situations that could present threats to compliance with the rules included in the Code. 2. R  equirements of the Securities Understand the ethical and independence requirements of the Securities and and Exchange Commission and Exchange Commission and the Public Company Accounting Oversight Board. the Public Company Accounting Oversight Board Apply the ethical requirements and independence rules of the Securities and Exchange Commission and the Public Company Accounting Oversight Board to situations that could compromise compliance or impair independence during an audit of an issuer. 3. R  equirements of the Government Understand the ethical and independence requirements of the Government Accountability Office and the Accountability Office Government Auditing Standards. Department of Labor Understand the independence requirements of the Department of Labor. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD7 Auditing and Attestation (AUD) Area I – Ethics, Professional Responsibilities and General Principles (15–25%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding A. Ethics, independence and professional responsibilities (continued) 3. R  equirements of the Government Apply the ethical requirements and independence rules of the Government Accountability Office and the Accountability Office Government Auditing Standards to situations that could Department of Labor (continued) present threats to compliance during an audit of, or attestation engagement for, a government entity or an entity receiving federal awards. Apply the independence rules of the Department of Labor to situations when an accountant would not be considered independent during an audit of employee benefit plans. B. Professional skepticism and professional judgment Understand the concepts of professional skepticism and professional judgment. Understand unconscious auditor biases and other impediments to acting with professional skepticism, including threats, incentives and judgment-making shortcuts. C. Nature and scope 1. Audit engagements Identify the nature, scope and objectives of the different types of audit engagements for issuers and nonissuers. 2. E  ngagements conducted under Identify the nature, scope and objectives of engagements performed in Government Accountability Office accordance with Government Accountability Office Government Auditing Government Auditing Standards Standards, including single audits. 3. Other engagements Identify the nature, scope and objectives of attestation engagements and accounting and review service engagements. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD8 Auditing and Attestation (AUD) Area I – Ethics, Professional Responsibilities and General Principles (15–25%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding D. Terms of engagement 1. Preconditions for an engagement Identify the preconditions needed for accepting or continuing an engagement. 2. Terms of engagement and the Identify the factors affecting the acceptance or continuance of an engagement, engagement letter including communication with predecessor auditors. Recall when it is acceptable to agree to management’s request for a change in the type of engagement (e.g., from an audit to a review). Perform procedures to confirm that a common understanding of the terms of an engagement exist with management and those charged with governance. Document the terms of an engagement in a written engagement letter or other suitable form of written agreement. E. Requirements for engagement documentation Identify the elements that comprise sufficient appropriate documentation in physical or electronic form for an engagement. Identify the requirements for the assembly and retention of documentation in physical or electronic form for an engagement. Prepare documentation that is sufficient to enable an experienced auditor or practitioner having no previous connection with an engagement to understand the nature, timing, extent and results of procedures performed, the significant findings and conclusions reached and the significant professional judgments made. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD9 Auditing and Attestation (AUD) Area I – Ethics, Professional Responsibilities and General Principles (15–25%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding F. Communication with management and those charged with governance 1. P  lanned scope and timing Identify the matters related to the planned scope and timing of an engagement of an engagement that should be communicated to management and those charged with governance. Prepare presentation materials and supporting schedules for use in communicating the planned scope and timing of an engagement to management and those charged with governance. 2. Internal control related matters Identify the matters related to deficiencies and material weaknesses in internal control that should be communicated to those charged with governance and management for an engagement and the timing of such communications. Prepare written communication materials for use in communicating identified internal control deficiencies and material weaknesses for an engagement to those charged with governance and management. G. Audit and assurance quality Identify a CPA firm’s responsibilities for its accounting and auditing practice’s engagement quality. Explain procedures and responsibilities for managing engagement quality. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD10 Auditing and Attestation (AUD) Area II – Assessing Risk and Developing a Planned Response (25–35%) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding A. Planning an engagement 1. Overall engagement strategy Explain the purpose and significance of the overall engagement strategy for an engagement. 2. Engagement plan Prepare a draft engagement plan for specific processes, accounts or classes of transactions considering the prior period and changes in the current period. Prepare supporting planning-related materials (e.g., client assistance request listings, time budgets) for a detailed engagement plan starting with the prior-year engagement plan or with a template. B. Understanding an entity and its environment 1. External factors Understand supply and demand, elasticity measures and profit maximization (e.g. marginal cost, marginal revenue). Understand the business cycles (trough, expansion, peak, recession) and leading, coincident and lagging indicators of economic activity (e.g., consumer price index, producer price index, federal funds rate, bond yields, unemployment). Identify relevant factors (e.g., economic, environmental, financial reporting framework, government policy, industry, regulatory, supply chain, technology) that could impact an entity, its operations, and/or the inherent risk of material misstatement. 2. Internal factors Understand the entity’s responsibilities with respect to the corporate governance provisions of the Sarbanes-Oxley Act of 2002. Identify the relevant factors that define the nature of an entity, including the impact on the risk of material misstatement (e.g., its operations, ownership and governance structure, investment and financing plans, selection of accounting policies, objectives and strategies, adoption and use of technologies including artificial intelligence). Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD11 Auditing and Attestation (AUD) Area II – Assessing Risk and Developing a Planned Response (25–35%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding C. Understanding an entity’s control environment and business processes, including information technology (IT) systems 1. C  OSO Internal Control – Define internal control within the context of the COSO internal control framework, Integrated Framework including the purpose, objectives and limitations of the framework. Identify and define the components, principles and underlying structure of the COSO internal control framework. 2. C  ontrol environment, IT general Understand the elements of an entity’s control environment, including the design controls, and entity-level controls and implementation of IT general controls and entity-level controls. Perform procedures to obtain an understanding of how an entity has responded to risks arising from the use of IT, including identifying and testing the design and implementation of relevant IT general controls. 3. B  usiness processes and the Identify and document the significant business processes and data flows that design of internal controls, directly or indirectly impact an entity’s financial statements. including the IT environment Perform a walkthrough of a significant business process and document (e.g., flow charts, process diagrams, narratives) the flow of relevant transactions and data from initiation through financial statement reporting and disclosure. Obtain an understanding of an entity’s IT infrastructure (e.g., ERP, cloud computing or hosting arrangements, custom or packaged applications) and document the procedures performed to obtain that understanding. Obtain an understanding of IT applications that are, directly or indirectly, the source of financial transactions or the data used to record financial transactions (e.g., how the entity uses IT applications to capture, store, and process information). Perform tests of the design and implementation of relevant automated and manual transaction-level internal controls (e.g. authorizations and approvals, reconciliations, verifications, physical or logical controls, segregation of duties). Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD12 Auditing and Attestation (AUD) Area II – Assessing Risk and Developing a Planned Response (25–35%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding C. Understanding an entity’s control environment and business processes, including information technology (IT) systems (continued) 3. Business processes and the Identify and document the relevant automated and manual controls within the flow design of internal controls, of an entity’s transactions for a significant business process and consider the effect including the IT environment of these controls on the completeness, accuracy and reliability of an entity’s data. (continued) Conclude whether relevant automated and manual transaction-level internal controls are effectively designed and placed in operation. 4. Implications of an entity Understand the differences between SOC 1® and SOC 2® engagements. using a service organization Identify and document the purpose and significance of an entity’s use of a service organization, including the impact of using a SOC 1® Type 2 report in an audit of an entity’s financial statements. Use a SOC 1® Type 2 report to determine the nature and extent of testing procedures to be performed in an audit of an entity’s financial statements. 5. L  imitations of controls and Understand the limitations of internal controls and the potential impact on the risk risk of management override of material misstatement of an entity’s financial statements. Identify and document the risks associated with management override of internal controls and the potential impact on the risk of material misstatement of an entity’s financial statements. D. Materiality 1. F  or the financial statements Understand materiality, including qualitative considerations, as it relates to the as a whole financial statements and related disclosures as a whole. Calculate materiality for an entity’s financial statements as a whole. Calculate the materiality level (or levels) to be applied to classes of transactions, account balances and disclosures in an audit of an issuer or nonissuer. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD13 Auditing and Attestation (AUD) Area II – Assessing Risk and Developing a Planned Response (25–35%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding D. Materiality (continued) 2. T  olerable misstatement Understand the use of tolerable misstatement or performance materiality in an and performance materiality audit. Determine tolerable misstatement or performance materiality for the purposes of assessing the risk of material misstatement and determining the nature, timing and extent of further audit procedures in an audit of an issuer or nonissuer. E. Assessing and responding to risks of material misstatement, whether due to fraud or error Determine the pressures, incentives and opportunities for fraud (e.g., fraudulent financial reporting, misappropriation of assets) that could lead to the risk of material misstatement. Determine risk of material misstatement, whether due to fraud or error, at the financial statement level and relevant assertion level for each significant class of transactions, significant account and disclosure. Determine a response to risks of material misstatement at the financial statement level (e.g. maintaining professional skepticism, engagement team supervision, incorporating elements of unpredictability), considering the auditor’s understanding of the control environment. Determine appropriate procedures to assess the operating effectiveness of relevant controls. Determine appropriate substantive procedures to test relevant assertions for each significant class of transactions, significant account and disclosure. Determine procedures to satisfy the requirements and objectives of an attestation engagement. Determine procedures to satisfy the requirements and objectives of an accounting and review services engagement. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD14 Auditing and Attestation (AUD) Area II – Assessing Risk and Developing a Planned Response (25–35%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding E. Assessing and responding to risks of material misstatement, whether due to fraud or error (continued) Assess risks of material misstatement, whether due to fraud or error, at the financial statement level and develop a response by leveraging the combined knowledge and understanding of the engagement team. Assess the potential impact of identified risks of material misstatement at the relevant assertion level for each significant class of transactions, significant account and disclosure, considering the controls the auditor intends to test. Analyze the risk of material misstatement, including the potential impact of individual and cumulative misstatements, to provide a basis for developing planned audit procedures. Use outputs from audit data analytic procedures (e.g. reports and visualizations) to identify transactions that may have a higher risk of material misstatement and interpret the results to develop planned audit procedures. F. Planning for and using the work of others Identify the factors to consider in determining the extent to which an engagement team can use the work of the internal audit function, IT auditor, auditor’s specialist, management’s specialist, component auditor or a referred-to auditor. Determine the nature and scope of the work of the internal audit function, IT auditor, auditor’s specialist, management’s specialist, component auditor or a referred-to auditor. Perform and document procedures to determine the extent to which an engagement team can use the work of the internal audit function, IT auditor, auditor’s specialist, management’s specialist, component auditor or a referred-to auditor. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD15 Auditing and Attestation (AUD) Area II – Assessing Risk and Developing a Planned Response (25–35%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding G. Specific areas of engagement risk 1. A  n entity’s compliance Understand the accountant’s responsibilities with respect to laws and regulations with laws and regulations that have a direct effect on the determination of material amounts or disclosures in an entity’s financial statements for an engagement. Understand the accountant’s responsibilities with respect to laws and regulations that are fundamental to an entity’s business but do not have a direct effect on the entity’s financial statements in an engagement. Perform tests of compliance with laws and regulations that have a direct effect on material amounts or disclosures in an entity’s financial statements in an engagement. Perform tests of compliance with laws and regulations that are fundamental to an entity’s business, but do not have a direct effect on the entity’s financial statements for an engagement. 2. Accounting estimates Recognize the potential impact of lower complexity and higher complexity significant accounting estimates on the risk of material misstatement, including the indicators of management bias. 3. R  elated parties and related Perform procedures to identify related party relationships and transactions, party transactions including consideration of significant unusual transactions and transactions with executive officers. 4. U  niform Guidance Understand when an entity is required to have a single audit in accordance with for single audits the audit requirements of the Uniform Guidance, including the identification of federal awards and major programs. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD16 Auditing and Attestation (AUD) Area III – Performing Further Procedures and Obtaining Evidence (30–40%) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding A. Use of data and information 1. R  equesting, preparing Explain the components of a relational database (e.g., tables, records, fields/ and transforming data attributes, primary and foreign keys, normalization). Explain the characteristics and uses of different measurement scales (e.g., nominal, ordinal, interval, ratio, continuous, discrete). Determine attribute structures, format, and sources of data needed when making a data extraction request to complete planned procedures. Determine methods to transform (e.g., preparing, cleaning, scrubbing) data to complete planned procedures. 2. R  eliability of data Perform procedures (e.g., agreeing information to original sources, validating and information search or query criteria used to obtain data) to validate the reliability (completeness, accuracy, authenticity and susceptibility to management bias) of data and information obtained from internal and external sources (e.g., analyses, schedules, reconciliations prepared using various technologies including artificial intelligence). 3. Data analytics Describe how to apply automated tools and techniques to process, organize, structure or present data in a given context to generate useful information that can be used as evidence. Perform procedures using outputs (e.g. reports, visualizations) from audit data analytic techniques to determine relationships, trends or notable items in the data and identify the appropriate audit response. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD17 Auditing and Attestation (AUD) Area III – Performing Further Procedures and Obtaining Evidence (30–40%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding B. Sufficient appropriate evidence Determine the sources of sufficient appropriate evidence (e.g., obtained from management’s specialists, obtained from external sources, developed by the audit team from internal or external sources). Exercise professional skepticism and professional judgment while analyzing information to be used as audit evidence taking into account its relevance and reliability, authenticity and whether such information corroborates or contradicts the assertions in the financial statements. Conclude whether sufficient appropriate evidence has been obtained to achieve the objectives of the planned procedures. C. Sampling techniques Understand the purpose and application of sampling techniques including the use of automated tools and audit data analytic techniques to identify significant events or transactions that may impact the financial statements. Identify the appropriate population of items to sample to meet the objectives of the planned procedures. Determine the appropriate sampling method to be used in order to accomplish the objective (control, attribute, test of detail) of the planned procedures. Use sampling techniques to extrapolate the characteristics of a population from a sample of items. Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD18 Auditing and Attestation (AUD) Area III – Performing Further Procedures and Obtaining Evidence (30–40%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding D. Procedures to obtain sufficient appropriate evidence 1. Test of controls Use observation and inspection to obtain evidence. and test of details Use recalculation (manually or using automated tools and techniques) to test the mathematical accuracy of information to obtain evidence. Use reperformance to independently execute procedures or controls to obtain evidence. Inquire of management and others to gather evidence and document the results. Analyze responses obtained during structured interviews or informal conversations with management and others, including those in non-financial roles, and ask relevant and effective follow-up questions to understand their perspectives and motivations. Perform tests of operating effectiveness of internal controls, including the analysis of exceptions to identify deficiencies in an audit of financial statements or an audit of internal control. Perform tests of details, including the analysis of exceptions, to identify potential misstatements in an audit of financial statements. 2. Analytical procedures Determine the suitability of substantive analytical procedures to provide evidence to support an identified assertion. Perform substantive analytical procedures, including developing an expectation, on an account balance to provide evidence to support an identified assertion. Perform analytical procedures near the end of an audit engagement that assist the auditor when forming an overall conclusion about whether the financial statements are consistent with the auditor’s understanding of the entity. Evaluate and investigate differences resulting from analytical procedures (e.g., fluctuations or relationships that are inconsistent with other information or expected values). Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD19 Auditing and Attestation (AUD) Area III – Performing Further Procedures and Obtaining Evidence (30–40%) (continued) Skill Remembering Content group/topic Application Analysis Evaluation Representative Task & Understanding D. Procedures to obtain sufficient appropriate evidence (continued) 3. External confirmations Confirm significant account balances and transactions using appropriate tools and techniques (e.g., confirmation services, electronic confirmations, manual confirmations) to obtain relevant and reliable evidence. Analyze external confirmation responses to determine the need for follow-up or further investigation. E. Specific matters that require special consideration 1. Accounting estimates Recalculate and reperform procedures to validate the inputs and assumptions of an entity’s significant accounting estimates with a higher risk of material misstatement or complexity, such as fair value estimates. Perform procedures (e.g. reviewing the work of a specialist and procedures performed by the engagement team) to validate an entity’s calculations and detailed support for significant accounting estimates, including consideration of information that contradicts assumptions made by management. Conclude on th