Section 1: 15–25%A2

Professional Standards and Regulatory Requirements

Exam insight

Expect 2-3 MCQs per sitting on the standard-setting hierarchy and which standards apply. The setup that catches people is a private company scenario paired with PCAOB answer choices, so 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.

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

Patterns in this topic

The exam re-skins the same archetypes. Recognize these here, then drill them in the Pattern Lab.

The Standards PickerIssuer or nonissuer, firm or engagement, picks the standard-setter and the requirements.The Planning PlaybookStrategy before plan, the successor drives predecessor contact, and analytics and brainstorming are required.

Exam tip

Study smarter: before you expand each card, cover the screen and try to recall what the concept means from its title alone. Retrieving it from memory builds the recall the exam actually tests, and it beats re-reading.