Question 1

Current professional standards prohibit accountants from performing engagements to review forecasts or projections.

Accepted Answer

A) True 
 B)False  True

Question 2

In a Type 2 engagement, the service auditor performs tests of the operating effectiveness of the controls, but does not have to perform any of the procedures performed in a Type 1 engagement.

Accepted Answer

A) True 
 B)False  False

Question 3

A public company interim review is performed following standards of the PCAOB and the review report refers to SSARS.

Accepted Answer

A) True 
 B)False  False

Question 4

One of the first steps that should be performed for a review of a nonpublic entity's financial statements is to

Accepted Answer

A)  read the financial statements. 
B)  obtain knowledge of the accounting principles and practices of the client's industry. 
C)  inquire whether management has omitted substantially all of the disclosures required by applicable accounting standards. 
D)  apply analytical procedures to provide limited assurance that no material modifications should be made to the financial statements. 
A)  read the financial statements. 
B)  obtain knowledge of the accounting principles and practices of the client's industry. 
C)  inquire whether management has omitted substantially all of the disclosures required by applicable accounting standards. 
D)  apply analytical procedures to provide limited assurance that no material modifications should be made to the financial statements.

Question 5

All of the following are steps that should be performed in a review engagement except for

Accepted Answer

A)  understand the company's ownership structure. 
B)  read the company's financial statements. 
C)  perform analytical procedures. 
D)  assess fraud risk. 
A)  understand the company's ownership structure. 
B)  read the company's financial statements. 
C)  perform analytical procedures. 
D)  assess fraud risk.

Question 6

Each page of the financial statements reviewed by the auditor should include the reference "See independent auditor's review report."

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a type of prospective financial statement as defined by the AICPA attestation standards?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 8

The standards for preparation, compilation, and review engagements of financial statements are the

Accepted Answer

A)  AICPA's Code of Professional Conduct. 
B)  Statements on Auditing Standards (SASs). 
C)  Statements of Standards on Attestation Engagements (SSAEs). 
D)  Statements on Standards for Accounting and Review Services (SSARS). 
A)  AICPA's Code of Professional Conduct. 
B)  Statements on Auditing Standards (SASs). 
C)  Statements of Standards on Attestation Engagements (SSAEs). 
D)  Statements on Standards for Accounting and Review Services (SSARS).

Question 9

Which of the following is not an element of the examination of prospective financial statements?

Accepted Answer

A)  evaluating the preparation of the prospective financial statements 
B)  understanding internal controls 
C)  evaluating the support underlying the assumptions 
D)  issuing an examination report 
A)  evaluating the preparation of the prospective financial statements 
B)  understanding internal controls 
C)  evaluating the support underlying the assumptions 
D)  issuing an examination report

Question 10

Reports on agreed-upon procedures are intended to be distributed

Accepted Answer

A)  to only the involved parties, who would have the requisite knowledge about those procedures and the level of assurance resulting from them. 
B)  to only the involved parties, who would have the requisite knowledge about those procedures but not the level of assurance resulting from them. 
C)  to any party to whom the client wishes. 
D)  only to the stockholders of the client. 
A)  to only the involved parties, who would have the requisite knowledge about those procedures and the level of assurance resulting from them. 
B)  to only the involved parties, who would have the requisite knowledge about those procedures but not the level of assurance resulting from them. 
C)  to any party to whom the client wishes. 
D)  only to the stockholders of the client.

Question 11

Briefly describe each of the five Trust Services Categories.

Accepted Answer

The five Trust Services categories are:

Question 12

A financial statement review conducted in compliance with Statements on Standards for Accounting and Review Services (SSARS) includes obtaining an understanding of internal control.

Accepted Answer

A) True 
 B)False

Question 13

The WebTrust service requires that a CPA update its testing of the e-commerce aspects of an entity's website at least every

Accepted Answer

A)  ninety days. 
B)  month. 
C)  six months. 
D)  twelve months. 
A)  ninety days. 
B)  month. 
C)  six months. 
D)  twelve months.

Question 14

Which of the following types of engagement reports would provide positive assurance?

Accepted Answer

A)  an examination 
B)  a review 
C)  an agreed-upon procedures engagement 
D)  a compilation 
A)  an examination 
B)  a review 
C)  an agreed-upon procedures engagement 
D)  a compilation

Question 15

For all three types of compilation reports, each page of the financial statements compiled by the auditor should state "See Auditor's Compilation Report."

Accepted Answer

A) True 
 B)False

Question 16

SSARS refers to CPAs performing reviews, compilations, and preparation services as auditors, not accountants.

Accepted Answer

A) True 
 B)False

Question 17

The use of positive assurance is appropriate in a review attestation report.

Accepted Answer

A) True 
 B)False

Question 18

Auditors frequently audit statements prepared on bases other than GAAP. Discuss four commonly used bases other than GAAP.

Accepted Answer

• Cash or modified cash basis. With the

Question 19

Which are prospective financial statements that present an entity's financial position, results of operations, and cash flows, to the best of the responsible party's knowledge and belief, given one or more hypothetical assumptions?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 20

In a WebTrust attestation engagement the client engages a CPA to provide what level of assurance that the company's website complies with Trust Services categories?

Accepted Answer

A)  absolute 
B)  reasonable 
C)  limited 
D)  moderate 
A)  absolute 
B)  reasonable 
C)  limited 
D)  moderate

Exam 25: Other Assurance Services

Current professional standards prohibit accountants from performing engagements to review forecasts or projections.

In a Type 2 engagement, the service auditor performs tests of the operating effectiveness of the controls, but does not have to perform any of the procedures performed in a Type 1 engagement.

A public company interim review is performed following standards of the PCAOB and the review report refers to SSARS.

One of the first steps that should be performed for a review of a nonpublic entity's financial statements is to

All of the following are steps that should be performed in a review engagement except for

Each page of the financial statements reviewed by the auditor should include the reference "See independent auditor's review report."

Which of the following is a type of prospective financial statement as defined by the AICPA attestation standards?

The standards for preparation, compilation, and review engagements of financial statements are the

Which of the following is not an element of the examination of prospective financial statements?

Reports on agreed-upon procedures are intended to be distributed

Briefly describe each of the five Trust Services Categories.

A financial statement review conducted in compliance with Statements on Standards for Accounting and Review Services (SSARS) includes obtaining an understanding of internal control.

The WebTrust service requires that a CPA update its testing of the e-commerce aspects of an entity's website at least every

Which of the following types of engagement reports would provide positive assurance?

For all three types of compilation reports, each page of the financial statements compiled by the auditor should state "See Auditor's Compilation Report."

SSARS refers to CPAs performing reviews, compilations, and preparation services as auditors, not accountants.

The use of positive assurance is appropriate in a review attestation report.

Auditors frequently audit statements prepared on bases other than GAAP. Discuss four commonly used bases other than GAAP.

Which are prospective financial statements that present an entity's financial position, results of operations, and cash flows, to the best of the responsible party's knowledge and belief, given one or more hypothetical assumptions?

In a WebTrust attestation engagement the client engages a CPA to provide what level of assurance that the company's website complies with Trust Services categories?

The Demand for Audit and Other Assurance Services

The CPA Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Materiality

Assessing the Risk of Material Misstatement

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Internal and Governmental Financial Auditing and Operational Auditing

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