Question 1

During a review of the financial statements of a nonpublic entity,an accountant becomes aware of inadequate disclosure that is material to the financial statements.If management refuses to correct the financial statement presentations,the accountant should

Accepted Answer

A)   Issue an adverse opinion.
B)   Issue an "except for" qualified opinion.
C)   Disclose this departure from generally accepted accounting principles in a separate paragraph of the report.
D)   Express only limited assurance on the financial statement presentations.E) A) and B)
F) C) and D)

Question 2

An accountant's compilation report on a financial forecast should include a statement that the

Accepted Answer

A)   Compilation does not include evaluation of the assumptions underlying the forecast.
B)   Hypothetical assumptions used in the forecast are reasonable.
C)   Range of assumptions selected is one in which one end of the range is less likely to occur than the other.
D)   Prospective statements are limited to presenting, in the form of a forecast, information that is the accountant's representation.E) A) and D)
F) A) and C)

Question 3

Accepting an engagement to examine an entity's financial projections would most likely be appropriate if distribution of the projections were limited to

Accepted Answer

A)   The general public on the entity's website.
B)   Potential stockholders who request a prospectus or a registration statement.
C)   A bank with which the entity is negotiating for a loan.
D)   All stockholders of record as of the report date.E) A) and C)
F) A) and B)

Question 4

Which of the following is a conceptual difference between the attestation standards and generally accepted auditing standards?

Accepted Answer

A)   The attestation standards provide a framework for the attest function beyond historical financial statements.
B)   The requirement that the practitioner be independent in mental attitude is omitted from the attestation standards.
C)   The attestation standards do not permit an attest engagement to be part of a business acquisition study or a feasibility study.
D)   None of the standards of fieldwork in generally accepted auditing standards are included in the attestation standards.E) None of the above
F) A) and D)

Question 5

Which of the following procedures is not usually performed by the accountant during a review engagement of a nonpublic entity?

Accepted Answer

A)   Inquiry about actions taken at meetings of the board of directors that may affect the financial statements.
B)   Issuance of a report stating that the review was performed in accordance with standards established by the AICPA.
C)   Reading of the financial statements to determine if they conform with generally accepted accounting principles.
D)   Communication of any material weaknesses discovered during the consideration of internal control.E) A) and B)
F) B) and C)

Question 6

During an engagement to review the financial statements of a nonpublic entity,an accountant becomes aware of a material departure from GAAP.If the accountant decides to modify the standard review report because management will not revise the financial statements,the accountant should

Accepted Answer

A)   Express negative assurance on the accounting principles that do not conform with GAAP.
B)   Disclose the departure from GAAP in a separate paragraph of the report.
C)   Issue an adverse or an "except for" qualified opinion, depending on materiality.
D)   Express positive assurance on the accounting principles that conform with GAAP.E) A) and B)
F) A) and C) B

Question 7

A SysTrust engagement is conducted under which of the following sets of standards?

Accepted Answer

A)   AICPA.
B)   Review.
C)   Attestation.
D)   Audit.E) B) and D)
F) None of the above

Question 8

Compilation reports may include

Accepted Answer

A)   Compilations when the accountant is not independent.
B)   Compilations with full disclosure.
C)   Compilations that omits substantially all disclosures.
D)   Any of the above.E) None of the above
F) B) and C)

Question 9

Which of the following is not a main goal of the internal auditing profession?

Accepted Answer

A)   Add value to an organization's operations.
B)   Help an organization to accomplish its objectives.
C)   Provide reliable information to external users.
D)   Improve the effectiveness of risk management of an organization.E) All of the above
F) C) and D)

Question 10

The report in a review engagement provides

Accepted Answer

A)   Limited assurance.
B)   Positive assurance.
C)   An opinion.
D)   A summary of findings.E) A) and C)
F) C) and D)

Question 11

Match between columns
                        Premises:  The practitioner must state the practitioner's conclusion about the subject matter or the assertion in relation to the criteria against which the subject matter was evaluated in the report
 The practitioner must state all of the practitioner's significant reservations about the engagement, the subject matter and, if applicable, the assertion related thereto in the report
 The practitioner must adequately plan the work and must properly supervise any assistants
 The practitioner must have adequate technical training and proficiency in the attest function
 The practitioner must exercise due professional care in the planning and performance of the engagement

Accepted Answer

The Answer of The auditor must have adequate technical training is...

Question 12

An accountant's standard report on a compilation of a projection should not include

Accepted Answer

A)   A statement that he or she does not express an opinion on the statements or assumptions.
B)   A statement that a compilation of a projection is limited in scope.
C)   A disclaimer of responsibility to update the report for events occurring after the report's date.
D)   A statement that the accountant expresses only limited assurance that the results may be achieved.E) A) and B)
F) A) and C)

Question 13

Jones Retailing,a nonpublic entity,has asked Winters,CPA,to compile financial statements that omit substantially all disclosures required by generally accepted accounting principles.Winters may compile such financial statements,provided the

Accepted Answer

A)   Reason for omitting the disclosures is explained in the engagement letter and acknowledged in the management representation letter.
B)   Financial statements are prepared on a comprehensive basis of accounting other than generally accepted accounting principles.
C)   Distribution of the financial statements is restricted to internal use only.
D)   Omission is not undertaken to mislead the users of the financial statements and is properly disclosed in the accountant's report.E) A) and D)
F) A) and C)

Question 14

The International Professional Practices Framework developed by the IIA includes all of the following types of guidance,except:

Accepted Answer

A)   Standards.
B)   Interpretations of Standards.
C)   Practice advisories.
D)   Practice guides.E) All of the above
F) B) and D) B

Question 15

How has the advancement in technology led to the creation of the Trust Services?

Accepted Answer

The advancement in technology has increa...

Question 16

May an accountant plan and perform an engagement to compile or review the financial statements of a not-for-profit entity if the accountant is unfamiliar with the specialized industry accounting principles?

Accepted Answer

A)   Only a compilation could be performed without the specialized knowledge.
B)   Only a review could be performed without the specialized knowledge.
C)   Both a compilation and a review could be performed without the specialized knowledge.
D)   Neither a compilation nor a review could be performed without the specialized knowledge.E) A) and B)
F) None of the above

Question 17

During a review of financial statements of a nonpublic entity,the CPA would be least likely to

Accepted Answer

A)   Perform analytical procedures designed to identify relationships that appear to be unusual.
B)   Obtain written confirmation from banks regarding loans to the entity.
C)   Obtain reports from other accountants who reviewed a portion of the total entity.
D)   Read the financial statements and consider their conformance with generally accepted accounting principles.E) B) and D)
F) B) and C) B

Question 18

Which of the following statements is not true concerning assurance services?

Accepted Answer

A)   The growth in assurance services has been driven in part by users' demands for more relevant information.
B)   Assurance services focus on improving the quality of information or its context, for decision makers.
C)   Unlike audit and attestation engagements, an engagement to perform assurance services does not require the CPA to consider information reliability.
D)   Auditing and attestation services can be viewed as subsets of assurance services since there is overlap in their objectives.E) A) and C)
F) A) and B)

Question 19

Which of the following should not be included in an accountant's standard report based upon the compilation of an entity's financial statements?

Accepted Answer

A)   A statement that a compilation is limited to presenting, in the form of financial statements, information that is the representation of management.
B)   A statement that the compilation was performed in accordance with standards established by the American Institute of CPAs.
C)   A statement that the accountant has not audited or reviewed the financial statements.
D)   A statement that the accountant does not express an opinion but expresses only limited assurance on the financial statements.E) B) and D)
F) B) and C)

Question 20

Statements on Standards for Accounting and Review Services (SSARS) require an accountant to report when the accountant has

Accepted Answer

A)   Typed client-prepared financial statements, without modification, as an accommodation to the client.
B)   Provided a client with a financial statement format that does not include dollar amounts, to be used by the client in preparing financial statements.
C)   Proposed correcting journal entries to be recorded by the client that change client-prepared financial statements.
D)   Generated, through the use of computer software, financial statements prepared in accordance with a comprehensive basis of accounting other than GAAP.E) C) and D)
F) B) and D)

Exam 21: Assurance,Attestation,and Internal Auditing Services

During a review of the financial statements of a nonpublic entity,an accountant becomes aware of inadequate disclosure that is material to the financial statements.If management refuses to correct the financial statement presentations,the accountant should

Correct Answer
verified

An accountant's compilation report on a financial forecast should include a statement that the

Correct Answer
verified

Accepting an engagement to examine an entity's financial projections would most likely be appropriate if distribution of the projections were limited to

Correct Answer
verified

Which of the following is a conceptual difference between the attestation standards and generally accepted auditing standards?

Correct Answer
verified

Which of the following procedures is not usually performed by the accountant during a review engagement of a nonpublic entity?

Correct Answer
verified

During an engagement to review the financial statements of a nonpublic entity,an accountant becomes aware of a material departure from GAAP.If the accountant decides to modify the standard review report because management will not revise the financial statements,the accountant should

Correct Answer
verified
B

A SysTrust engagement is conducted under which of the following sets of standards?

Correct Answer
verified

Compilation reports may include

Correct Answer
verified

Which of the following is not a main goal of the internal auditing profession?

Correct Answer
verified

The report in a review engagement provides

Correct Answer
verified

Match the attestation standard with the generally accepted auditing standard that is most similar in nature.

An accountant's standard report on a compilation of a projection should not include

Correct Answer
verified

Jones Retailing,a nonpublic entity,has asked Winters,CPA,to compile financial statements that omit substantially all disclosures required by generally accepted accounting principles.Winters may compile such financial statements,provided the

Correct Answer
verified

The International Professional Practices Framework developed by the IIA includes all of the following types of guidance,except:

Correct Answer
verified
B

How has the advancement in technology led to the creation of the Trust Services?

Correct Answer
verified
The advancement in technology has increa...
View Answer

May an accountant plan and perform an engagement to compile or review the financial statements of a not-for-profit entity if the accountant is unfamiliar with the specialized industry accounting principles?

Correct Answer
verified

During a review of financial statements of a nonpublic entity,the CPA would be least likely to

Correct Answer
verified
B

Which of the following statements is not true concerning assurance services?

Correct Answer
verified

Which of the following should not be included in an accountant's standard report based upon the compilation of an entity's financial statements?

Correct Answer
verified

Statements on Standards for Accounting and Review Services (SSARS) require an accountant to report when the accountant has

Correct Answer
verified

Exam 21: Assurance,Attestation,and Internal Auditing Services

During a review of the financial statements of a nonpublic entity,an accountant becomes aware of inadequate disclosure that is material to the financial statements.If management refuses to correct the financial statement presentations,the accountant should

Correct AnswerverifiedShow Answer

An accountant's compilation report on a financial forecast should include a statement that the

Correct AnswerverifiedShow Answer

Accepting an engagement to examine an entity's financial projections would most likely be appropriate if distribution of the projections were limited to

Correct AnswerverifiedShow Answer

Which of the following is a conceptual difference between the attestation standards and generally accepted auditing standards?

Correct AnswerverifiedShow Answer

Which of the following procedures is not usually performed by the accountant during a review engagement of a nonpublic entity?

Correct AnswerverifiedShow Answer

During an engagement to review the financial statements of a nonpublic entity,an accountant becomes aware of a material departure from GAAP.If the accountant decides to modify the standard review report because management will not revise the financial statements,the accountant should

Correct AnswerverifiedB

A SysTrust engagement is conducted under which of the following sets of standards?

Correct AnswerverifiedShow Answer

Compilation reports may include

Correct AnswerverifiedShow Answer

Which of the following is not a main goal of the internal auditing profession?

Correct AnswerverifiedShow Answer

The report in a review engagement provides

Correct AnswerverifiedShow Answer

Match the attestation standard with the generally accepted auditing standard that is most similar in nature.

An accountant's standard report on a compilation of a projection should not include

Correct AnswerverifiedShow Answer

Jones Retailing,a nonpublic entity,has asked Winters,CPA,to compile financial statements that omit substantially all disclosures required by generally accepted accounting principles.Winters may compile such financial statements,provided the

Correct AnswerverifiedShow Answer

The International Professional Practices Framework developed by the IIA includes all of the following types of guidance,except:

Correct AnswerverifiedB

How has the advancement in technology led to the creation of the Trust Services?

Correct AnswerverifiedThe advancement in technology has increa...View AnswerShow Answer

May an accountant plan and perform an engagement to compile or review the financial statements of a not-for-profit entity if the accountant is unfamiliar with the specialized industry accounting principles?

Correct AnswerverifiedShow Answer

During a review of financial statements of a nonpublic entity,the CPA would be least likely to

Correct AnswerverifiedB

Which of the following statements is not true concerning assurance services?

Correct AnswerverifiedShow Answer

Which of the following should not be included in an accountant's standard report based upon the compilation of an entity's financial statements?

Correct AnswerverifiedShow Answer

Statements on Standards for Accounting and Review Services (SSARS) require an accountant to report when the accountant has

Correct AnswerverifiedShow Answer

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B

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Correct Answer
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B

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The advancement in technology has increa...
View Answer

Correct Answer
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B

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Correct Answer
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