Exam 20: Other Assurance and Nonassurance Services

In addition to having modifications of wording for the financial statement audit opinion, other types of opinions can have modifications as well. Which of the following describes a situation where there would be a qualification or disclaimer of opinion for a direct reporting engagement?

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(Multiple Choice)

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Question 1

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Define "attestation engagements."

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Question 2

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An attestation engagement is a special form of assurance engagement, such as a financial statement audit, in which the auditor evaluates the information provided by one party, using suitable criteria, and issues a report about the reliability of this information to another party.

Yvan is preparing the audit plan for Share the Wealth, a non-profit organization. Share the Wealth is a large Montreal-based organization that receives corporate donations and has many stores that collect and re-sell costume jewelry and clothing. The purpose of the organization is to build recreation areas for children in less-fortunate areas of the city. Share the Wealth was started by two sisters. One of the sisters is still actively involved in the organization, but the other sister has been devoting less time to the organization since she has had triplets. Share the Wealth has a total of eight stores in Montreal where individuals can drop off donations and customers can purchase the second-hand clothing and costume jewelry. Share the Wealth has a total of 12 employees who work in the various stores. Depending on the schedule and availability, the employees will randomly be assigned to a store for the week. Required: Provide three procedures that Yvan should consider when performing the review engagement of Share the Wealth.

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Question 3

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Student answers may vary.
- Awareness of fraud risk: Is leadership organized? Is there volunteer and staff rotation? In the case of Share the Wealth, risk is increased since it appears that only one of the sisters is managing the operations now.There may be risk that she is overwhelmed or unable to run the operations on her own.On the other hand, the risk of fraud is diminished since it appears that the staff changes location each week.This will help early detection of fraud.Yvan should inquire how the revenues (funds)were spent during the year.He should ask whether the funds are spent for valid operating expenses and the remaining spendings are in line with the objective of building recreation spaces in less-fortunate communities.
- Yvan should perform analytical procedures (e.g., comparing gross profit by location)
- Yvan should inquire of management how regulatory filings are handled

Define "direct reporting engagements."

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Question 4

Performing inquiry, analytical procedures, and discussion with the limited objective of assessing whether the information being reported on is plausible within the framework of appropriate criteria is the definition of a(n)

(Multiple Choice)

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Question 5

An accountant who reviews the financial statements of an entity should issue a report stating that a review

(Multiple Choice)

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Question 6

Which of the following procedures would most likely be conducted by an accountant during a compilation engagement?

(Multiple Choice)

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Question 7

The Federal Auditor General provides the results of operational audits to Parliament in Auditor General reports. What type of engagements are these?

(Multiple Choice)

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Question 8

"An engagement where the practitioner expresses a conclusion on a written assertion about a subject prepared by a party accountable for the assertion, such as management" is the definition of a(n)

(Multiple Choice)

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Question 9

A review engagement requires what amount of evidence to be accumulated?

(Multiple Choice)

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Question 10

The accountant is working on an engagement with respect to the client's financial statements. Which of the following engagements would omit an assessment of the client's accounting policies' compliance with GAAP?

(Multiple Choice)

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Question 11

"An engagement where there is an accountability relationship between two or more parties and the practitioner is engaged to issue a written communication expressing a conclusion about subject matter for which the accountable party is responsible" is the definition of a(n)

(Multiple Choice)

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Question 12

You are a public accountant retained by the manager of a cooperative retirement village to do "write-up work." You are expected to prepare unaudited financial statements with each page marked "unaudited" and accompanied by a disclaimer of opinion stating no audit was made. In performing the work, you discover that there are no invoices to support $25 000 of the manager's claimed disbursements. The manager informs you that all the disbursements are proper. What should you do?

(Multiple Choice)

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Question 13

As part of the conduct of a review engagement, which of the following would be a typical procedure used for the assessment of the ending accounts receivable balance?

(Multiple Choice)

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Question 14

Which of the following techniques would be conducted by a practitioner when conducting a review of compliance with agreements and regulations?

(Multiple Choice)

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Question 15

When is negative assurance used during a review engagement?

(Multiple Choice)

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Question 16

What is the purpose of an auditor reporting on the effectiveness of internal control over financial reporting?

(Multiple Choice)

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Question 17

When would the public accountant conduct audit procedures during a review engagement?

(Multiple Choice)

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Question 18

You have just recently become a member of your local non-profit housing co-op by moving into the largest unit. The board of directors has asked that you handle the review engagement but you are concerned about independence. What is a practical way for you to stay in the co-op but also perform the review engagement?

(Multiple Choice)

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Question 19

A financial statement review emphasizes four broad areas, one of which is to "perform analytical procedures." State the other three areas emphasized.

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Question 20

Showing 1 - 20 of 59

In addition to having modifications of wording for the financial statement audit opinion, other types of opinions can have modifications as well. Which of the following describes a situation where there would be a qualification or disclaimer of opinion for a direct reporting engagement?

Define "attestation engagements."

Define "direct reporting engagements."

Performing inquiry, analytical procedures, and discussion with the limited objective of assessing whether the information being reported on is plausible within the framework of appropriate criteria is the definition of a(n)

An accountant who reviews the financial statements of an entity should issue a report stating that a review

Which of the following procedures would most likely be conducted by an accountant during a compilation engagement?

The Federal Auditor General provides the results of operational audits to Parliament in Auditor General reports. What type of engagements are these?

"An engagement where the practitioner expresses a conclusion on a written assertion about a subject prepared by a party accountable for the assertion, such as management" is the definition of a(n)

A review engagement requires what amount of evidence to be accumulated?

The accountant is working on an engagement with respect to the client's financial statements. Which of the following engagements would omit an assessment of the client's accounting policies' compliance with GAAP?

"An engagement where there is an accountability relationship between two or more parties and the practitioner is engaged to issue a written communication expressing a conclusion about subject matter for which the accountable party is responsible" is the definition of a(n)

As part of the conduct of a review engagement, which of the following would be a typical procedure used for the assessment of the ending accounts receivable balance?

Which of the following techniques would be conducted by a practitioner when conducting a review of compliance with agreements and regulations?

When is negative assurance used during a review engagement?

What is the purpose of an auditor reporting on the effectiveness of internal control over financial reporting?

When would the public accountant conduct audit procedures during a review engagement?

A financial statement review emphasizes four broad areas, one of which is to "perform analytical procedures." State the other three areas emphasized.

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

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