Professional Standards and Regulatory Requirements
Expect 2-3 MCQs per sitting on the standard-setting hierarchy and which standards apply. The #1 AICPA trap: a private company scenario paired with PCAOB answer choices -- skip the issuer/nonissuer check and you get burned. One commonly missed detail: AU-C 200 sets the auditor's overall objectives (reasonable assurance and reporting) and defines professional skepticism and professional judgment, ideas that run through every other AU-C section. Key standards: AU-C 200 (overall objectives), AU-C 220 (engagement-level quality management, per SAS 146), SQMS 1 and 2 (firm-level quality management, effective December 15, 2025), SSARS 21/25, and SSAE 18/19.
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What AICPA wants you to know
- 1Identify the standard-setting bodies for audits, reviews, and compilations
- 2Distinguish between AICPA standards (SAS, SSARS, SSAE) and PCAOB standards
- 3Understand the role of the PCAOB in auditing public companies
- 4Explain the quality management standards (SQMS 1 and 2) and their application to CPA firms
- 5Recognize the hierarchy of GAAS and their relationship to professional standards