The Auditing and Attestation (AUD) section of the CPA exam will test your knowledge on the AICPA’s professional code of conduct, independence rules, integrated and non-integrated audits, attestation engagements, and other types of accounting and review engagements. To successfully pass the AUD section of the CPA exam, you need to look to your future and put yourself in the role of a CPA or audit professional. You have to think about how you would explain your approach and rationale to an audit partner or your client.
While AUD doesn’t test as much material as FAR or REG, AUD is very conceptual and requires you to comprehend, interpret, and apply the material. If you try to memorize AUD, you will fail! With an average pass rate of 48% in 2022, and an average pass rate of 50% over the last 5 years, only FAR is lower.
This page provides you a comprehensive guide of the AUD CPA exam section, including trends in historical pass rates, CPA exam format, AICPA blueprint topics, question types, key areas to focus on, common AUD simulation topics, general AUD tips, and frequently asked questions about AUD.
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Over the last 5 years, the pass rate for AUD has an average of 50%, with both 2021 and 2022 CPA Exam pass rates trending below the average.
We completely understand why a historical CPA Exam pass rate of 50% over the last 5 years may have you worried! With Universal CPA Review, we’re changing how students prepare for the AUD CPA exam by using visual learning techniques and step-by-step video explanations that you can snack on throughout your AUD CPA Exam study journey!
It is very important to understand the structure of the AUD exam so that you have a clear understanding of what to expect on exam day. We will go through all of the relevant information that you should understand so that your mind will be at ease and you can focus on efficiently and effectively solving the multiple choice questions and task-based simulations you see on exam day at the Prometric Center.
You will have a total of 4 hours to complete all five testlets. You will have an option 15 minute break after you complete your 3rd testlet and the break will not count towards your 4 hours. The computer will ask you whether you would like to take the break or continue with your exam. We recommend utilizing the break to collect your thoughts and stamina as you will be approximately 2.5 hours into your exam by the time you finish the 3rd testlest. Once the 4 hour clock expires, your exam will automatically be closed and submitted, and any questions in-progress will be submitted as is. You will get partial credit for the simulation you are working on when time expires. We have another article that outlines how the CPA Exam is graded. To learn more, feel free to check it out!
The AUD CPA exam consists of 72 multiple choice questions (more than FAR) and 8 task-based simulations. Your score will be calculated based on a weighted combination, with multiple choice questions making up 50% of your score and task-based simulations making up the other 50%.
Multiple choice questions – Will consist of one or more paragraphs and full of details and terminology that you will need to dissect. There will be four answer choices to choose from, and you will have to select A, B, C, or D. Not every single multiple choice question will be considered in the calculation of your score. AUD contains 12 pretest multiple choice questions, which means they will not be graded. Therefore, only a maximum of 60 multiple choice questions will be used to calculate your score. The AICPA may remove additional questions if they are deemed to be unfair.
Task-based simulations – Will consist of a prompt, exhibits, and then one more tasks that you must complete. These tasks consist of dropdowns, proposing adjusting journal entries, and completing report documents. Of the 8 simulations, 1 will be a pretest and will not count towards your score.
AUD consists of 5 total testlets. The first two testlets consist entirely of multiple choice questions, with 36 multiple choice questions in each testlet. The third testlet contains 2 task-based simulations, and then the last two teslets contain 3 task-based simulations each. You will also have a period of 10 minutes before your exam starts to go through the welcome and confidentiality screen. At the end of the 4 hour exam, there is a post-exam survey you will out, which takes about 5 minutes.
While Universal CPA Review aligns with the AICPA blueprint for the AUD CPA exam, you should still be familiar with the AUD blueprint. The AICPA blueprint is essentially an outline of all the different topics that can be tested, the skillsets required for each topic, and the weighting of each topic.
A. Nature and scope
B. Ethics, independence and professional conduct
C. Terms of engagement
D. Requirements for engagement documentation
E. Communication with management and those charged with governance
F. A firm’s system of quality control, including quality control at the engagement level
A. Planning an engagement
B. Understanding an entity and its environment
C. Understanding an entity’s control environment and business processes, including information technology (IT) systems
D. Assessing risks due to fraud, including discussions among the engagement team about the risk of material misstatement due to fraud or error
E. Identifying and assessing the risk of material misstatement, whether due to error or fraud, and planning further procedures responsive to identified risks
G. Planning for and using the work of others
H. Specific areas of engagement risk
A. Sufficient appropriate evidence
B. General procedures to obtain sufficient appropriate evidence
C. Specific procedures to obtain sufficient appropriate evidence
D. Specific matters that require special consideration
E. Misstatements and internal control deficiencies
F. Written representations
G. Subsequent events and subsequently discovered facts
A. Reports on auditing engagements
B. Reports on attestation engagements
C. Accounting and review service engagements
D. Reporting on compliance
E. Other reporting considerations
As mentioned in our FAR CPA Exam guide, we recommend taking AUD after you have passed FAR. FAR focuses on understanding financial statements, and in AUD, you need to understand how to audit financial statements. Wouldn’t it be pretty hard to understand how to audit financial statements if you don’t understand how to read and interpret financial statements? Audit also requires that you understand how to propose adjusting journal entries for any misstatements identified during the course of an audit.
At a high-level, your timeline will consistent of working through each module in the Universal CPA course. Each module has been designed to cover certain blueprint topics. Each module will have a video lecture, study guide, multiple choice questions (with video explanations), and possibly a task-based simulation (if applicable). There are a variety of different strategies you can take for each module, but the general approach is to watch the video lecture, and then work through the multiple choice questions, and watch the video explanations. You can utilize the study guide (textbook) to review what you learned in the lecture. For the task-based simulations, you can work through them after completing the multiple-choice questions, or you can revisit the simulation during your cumulative review.
We recommend doing cumulative practice tests on a weekly basis at a minimum (typically on the weekends). This means that if you have covered material from Chapters 1, 2, and 3, then you should perform a cumulative practice test over all 3 chapters at once. This will not only help with retention of the information, but it will also help you learn to get comfortable with seeing topics in no particular order. Watch our video tutorial on how to set up a cumulative practice test and why they are so important!
Looking for some tips specific to the AUD CPA exam? Here is a list of tips we put together to help you pass AUD:
1) Try to explain it to the audit partner or client – AUD is very conceptual, which requires you to understand the intuition behind these topics. If you try to memorize this information, the AICPA will expose your lack of understanding of the information. The multiple-choice questions and simulations are worded in a manner that will determine whether you truly understand this information or if you just memorized the answers from your review course. Pretend you need to explain the answer to an audit partner or your client. Would you be able to explain your understanding in a clear and concise manner? Or would you stumble over your words and struggle to make sense? Candidates that can get to the point where they explain the information to themselves or someone else will be better positioned to tackle the complex questions on the AUD CPA exam.
2) Carefully read the questions and ALL of the options – This seems pretty obvious, but most candidates realize that they did not fully understand the question after they realize they got it wrong. AUD multiple choice questions contains phrases such as “best” or “most likely”. This means that one answer could be correct, but there is also an option that is better. I know this sounds subjective, but remember, there is only one right answer on the exam. Therefore, it is very important to carefully read the question in detail and you must read all of the options. In the Universal CPA course, we breakdown the question and the answer options in all of the explanation videos.
3) Refresh yourself on FAR journal entries – This is AUD, right? Yes, that is correct. While FAR focused on what journal entries the company would record for certain transactions and events, AUD focuses will test your understanding of what journal entries an audit team would propose. When an audit team identifies a material misstatement, they would propose a journal entry for the client to adjust their financial statements. You will need to understand journal entries for both multiple-choice questions and simulations. The Universal team compiled a list of 100+ journal entries that you should be familiar with for AUD!
4) Don’t forget about SSAE and SSARS – These are standards for other types of engagements CPAs and would perform. The exam often tests you on your ability to understand the similarities and differences between the types of engagements that a CPA would perform. This includes examinations, reviews, compilations, agreed-upon procedures, and preparation.
5) Watch the task-based simulation explanation videos – You may decide that you do not have the extra time to practice the task-based simulations, which is completely understandable. However, you should still become familiar with the structure of commonly tested AUD simulations and have a basic plan of attack. The Universal CPA Review course has video explanations that walk you through simulations that are commonly tested on the AUD exam. The CPA instructor will help you understand the details and format of the simulation, how to navigate through multiple exhibits, and how to actually solve the simulation from start to finish. The video explanations will revisit key topics learned in the lectures and utilize relevant visuals to help the learning stick!
Earlier in the AUD CPA exam guide, you learned the format of the the AUD CPA exam. The exam includes multiple-choice questions and task-based simulations. You will have a total of 4 hours to complete the exam, but how much time should you spend on each question so you can complete the exam within the allotted time?
Multiple-choice questions – We recommend spending 2 hours on the two multiple-choice testlets. Since there are 72 multiple-choice questions, we recommend averaging about 1.7 minutes per question. You will spend more time on difficult questions, but less time on the easier questions. It’s very important not to spend too much time on a particular question!
Task-based simulations – The remaining 2 hours can be spent completing the 8 task-based simulations. One of the simulations will be the authoritative research simulation, and you should spend no more than 10 minutes on it. The score weighting is significantly lower for the research simulation as compared to the other simulations. For the other simulations, you should spend about 15 minutes per simulation. The simulations will be difficult, so you will need to understand the directions, quickly understand what information is in the exhibits, and then complete the simulation!
While you could see a simulation on just about any topic on the AUD blueprint, the list below represents topics that you should focus on during during your AUD preparation. Simulations on these topics are included in the Universal course. Since it is likely that each simulation will have multiple exhibits, we have included multiple exhibits in the Universal course so that you can learn how to navigate through exhibits in an efficient manner. This list is not meant to be comprehensive, but rather, it is intended to provide you direction and guidance and where you should focus your time and efforts.
1) Components of audit risk – You will need to understand the key components of audit risk (inherent risk, control risk, and detection risk), and what increases or decreases those risks. The simulation will likely give you an example scenario or situation and require you to choose what type of risk is impacted and whether it increases or decreases. For example, if it said “The audit client’s industry experienced a severe downturn due to changes in regulation”, then you would know that the audit team would increase the level of inherent risk in the audit.
2) Evaluating potential misstatements and proposing adjusting entries – This topic is by far the most common and most important type of simulation. If an audit team executes a perfect audit, but is unable to properly evaluate misstatements and correct the financial statements, then what is the point? The simulation will likely give you exhibits that detail the results of an audit test and you will be required to determine if it results in a material misstatement. If there is a material misstatement, you will need to provide the adjusting entry that would be proposed to the company so that the financial statements can be corrected.
The bottom line is that the CPA AUD exam is very difficult to pass, but with the right approach, you can pass the AUD exam on your first attempt. With the Universal CPA course, you can be one of the many Universal students who have passed AUD on their first attempt, or passed AUD after adding the Universal course as a supplement to their existing review course. With the bite-sized video lectures and step-by-step explanation videos, you will be able to learn the previously AICPA released multiple choice questions at the depth that is necessary. Rather than memorizing information like other courses encourage, you will truly learn the intuition behind these complex topics. If you want to pass the AUD exam, then start a free 7-day trial today!
You’ll have full access to the Universal CPA platform! Click the button below to sign up for a free trial. No credit card required.
Unfortunately, there is not a set amount of study time that it takes to be sufficiently prepared to pass AUD. Every candidate will move through the material at a different pace. We generally suggest you plan for 100 to 125 hours of studying when you develop your initial study plan. This number might be lower if you have already taken other sections and have a good approach in place or you have prior audit experience.
For some candidates, AUD is the hardest section of the CPA exam because its very conceptual. Over the last 5 years, AUD has an average pass rate of ~50%, which means it is the 2nd lowest (FAR is the lowest at ~46%).
We recommend taking FAR before AUD since you must understand financial statements to understand how to audit financial statements. Otherwise, AUD can be taken before or after REG and BEC.
Hopefully you only need to take AUD once! However, if you do fail, you can take it until you pass. With continuous testing, you no longer have to wait until the next testing window to sit for a retake.
There are 5 testlets on the FAR exam. Testlets 1 and 2 have 36 multiple choice questions each. Testlet 3 contains 2 simulations. Testlets 4 and 5 contain 3 simulations.
This amounts to a total of 72 multiple choice questions and 8 simulations. It is important to understand that there are 12 pretest multiple choice questions and 1 pretest simulation. Pretest questions do not count towards your score. You will not know which multiple choice questions or simulations are tagged as pretest.
The pass rate for AUD has averaged around 50% over the last five years. AUD has the 2nd lowest pass rate, with only FAR being lower at 46%.
You will have 4 total hours to complete the exam. You will have an option 15 minute break after testlet #3 which does not count towards the 4 hour total.
Multiple choice questions will account for 50% of your score, with task-based simulations accounting for the other 50% of your score.
There are certain topics in AUD that are more commonly see in a simulation. The most important simulation topics to be familiar with relate to the transaction cycles (assertions and audit evidence), evaluating potential misstatements, and proposing adjusting journal entries.
The AICPA sample test includes simulations on these key topics and we have included them in the Universal course with full detailed text and video explanations.
Yes, the AICPA has confirmed that the AUD blueprints will change with the CPA Evolution. However, we do not expect any major or drastic changes as there has bee no fundamental change in what a licensed CPA needs to understand about financial statements. Learn more about the CPA Evolution here.
If you are planning to study for other sections of the CPA exam soon, check out our detailed guides for BEC, FAR, and REG! These comprehensive study guides will help you learn everything you need to know so that you can pass those sections and move on in your CPA journey!