Question 1

One of the bases other than GAAP or IFRS is the Financial reporting framework for small- and medium-sized businesses. This basis

Accepted Answer

A)  has not yet been approved by the AICPA. 
B)  is the same as the income tax basis. 
C)  draws upon a blend of traditional accounting principles and accrual income tax methods of accounting. 
D)  must be used by a business with sales under $1 million. 
A)  has not yet been approved by the AICPA. 
B)  is the same as the income tax basis. 
C)  draws upon a blend of traditional accounting principles and accrual income tax methods of accounting. 
D)  must be used by a business with sales under $1 million.

Question 2

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

Accepted Answer

A)  is substantially equivalent in scope to an audit. 
B)  is substantially more in scope than a compilation. 
C)  is substantially less in scope than an audit. 
D)  provides only minimal assurance that the financial statements are fairly presented. 
A)  is substantially equivalent in scope to an audit. 
B)  is substantially more in scope than a compilation. 
C)  is substantially less in scope than an audit. 
D)  provides only minimal assurance that the financial statements are fairly presented.

Question 3

Considerable guidance is provided by the AICPA Guide Prospective Financial Statements which includes criteria against which an attestation engagement can be compared.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not one of the types of engagements and related forms of conclusions that are defined by the attestation standards?

Accepted Answer

A)  reviews 
B)  compilations 
C)  examinations 
D)  agreed-upon procedures 
A)  reviews 
B)  compilations 
C)  examinations 
D)  agreed-upon procedures

Question 5

The amount of evidence and assurance needed for each engagement is defined by the profession, reducing the need for the accountant to make judgments for these engagements.

Accepted Answer

A) True 
 B)False

Question 6

Statements on Standards for Attestation Engagements (SSAEs) are issued by the Auditing Standards Board of the AICPA.

Accepted Answer

A) True 
 B)False

Question 7

The distribution of which of the following types of reports is unrestricted?

Accepted Answer

A)  examinations and reviews 
B)  reviews and agreed-upon procedures 
C)  examinations and agreed-upon procedures 
D)  examinations, reviews, and agreed-upon procedures 
A)  examinations and reviews 
B)  reviews and agreed-upon procedures 
C)  examinations and agreed-upon procedures 
D)  examinations, reviews, and agreed-upon procedures

Question 8

Like SSARS reviews, reviews for public companies do not provide a basis for expressing positive opinion level assurance. However, these two types of reviews differ in several areas. Name three of the four differences.

Accepted Answer

• Because an annual audit is also perfor

Question 9

Examination attestation engagements result in a conclusion that is in a positive form, whereas review attestation engagements result in a conclusion in the form of a negative assurance.

Accepted Answer

A) True 
 B)False

Question 10

Statements on Standards for Accounting and Review Services (SSARS) govern the CPA's association with unaudited financial statements of nonpublic companies.

Accepted Answer

A) True 
 B)False

Question 11

Define forecast and projection.

Accepted Answer

Forecasts are prospective financial stat

Question 12

Compilation reports may be of all except which of the following types?

Accepted Answer

A)  compilation with limited independence 
B)  compilation with full disclosure 
C)  compilation without independence 
D)  compilation that omits substantially all disclosures 
A)  compilation with limited independence 
B)  compilation with full disclosure 
C)  compilation without independence 
D)  compilation that omits substantially all disclosures

Question 13

Clients occasionally enter into loan agreements that require them to provide the ________ with a report from a CPA about the existence or nonexistence of some condition.

Accepted Answer

A)  underwriters of securities 
B)  audit committee 
C)  lender 
D)  Securities and Exchange Commission 
A)  underwriters of securities 
B)  audit committee 
C)  lender 
D)  Securities and Exchange Commission

Question 14

When performing a review (SSARS review) of financial statements, the accountant is required to obtain a letter of representation from management.

Accepted Answer

A) True 
 B)False

Question 15

There are five Trust Service categories, including security and viability.

Accepted Answer

A) True 
 B)False

Question 16

As a CPA you have been asked to examine an entity's financial projections. Acceptance of the engagement would be appropriate if distribution is limited to

Accepted Answer

A)  stockholders of record as of the date of the report. 
B)  potential investors and creditors by posting on the company's website. 
C)  general public by posting on the company's website. 
D)  a financial institution for which the company is negotiating a loan. 
A)  stockholders of record as of the date of the report. 
B)  potential investors and creditors by posting on the company's website. 
C)  general public by posting on the company's website. 
D)  a financial institution for which the company is negotiating a loan.

Question 17

CPAs must be independent to issue a review report.

Accepted Answer

A) True 
 B)False

Question 18

The guidance for service auditors has been moved to the attestation standards.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a correct statement regarding review, compilation, and preparation services?

Accepted Answer

A)  A written engagement letter is not needed for a review, compilation or preparation service. 
B)  The Statements on Standards for Accounting and Review Services (SSARS) clarity project used international standards as the base standard when revising the SSARS. 
C)  CPAs must be independent of the client in a review service engagement and for an audit engagement. 
D)  The amount of evidence accumulated in a review is minimal. 
A)  A written engagement letter is not needed for a review, compilation or preparation service. 
B)  The Statements on Standards for Accounting and Review Services (SSARS) clarity project used international standards as the base standard when revising the SSARS. 
C)  CPAs must be independent of the client in a review service engagement and for an audit engagement. 
D)  The amount of evidence accumulated in a review is minimal.

Question 20

Statements on Standards for Accounting and Review Services (SSARS) are issued by the Accounting and Review Services Committee of the AICPA.

Accepted Answer

A) True 
 B)False

Exam 25: Other Assurance Services

One of the bases other than GAAP or IFRS is the Financial reporting framework for small- and medium-sized businesses. This basis

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

Considerable guidance is provided by the AICPA Guide Prospective Financial Statements which includes criteria against which an attestation engagement can be compared.

Which of the following is not one of the types of engagements and related forms of conclusions that are defined by the attestation standards?

The amount of evidence and assurance needed for each engagement is defined by the profession, reducing the need for the accountant to make judgments for these engagements.

Statements on Standards for Attestation Engagements (SSAEs) are issued by the Auditing Standards Board of the AICPA.

The distribution of which of the following types of reports is unrestricted?

Like SSARS reviews, reviews for public companies do not provide a basis for expressing positive opinion level assurance. However, these two types of reviews differ in several areas. Name three of the four differences.

Examination attestation engagements result in a conclusion that is in a positive form, whereas review attestation engagements result in a conclusion in the form of a negative assurance.

Statements on Standards for Accounting and Review Services (SSARS) govern the CPA's association with unaudited financial statements of nonpublic companies.

Define forecast and projection.

Compilation reports may be of all except which of the following types?

Clients occasionally enter into loan agreements that require them to provide the ________ with a report from a CPA about the existence or nonexistence of some condition.

When performing a review (SSARS review) of financial statements, the accountant is required to obtain a letter of representation from management.

There are five Trust Service categories, including security and viability.

As a CPA you have been asked to examine an entity's financial projections. Acceptance of the engagement would be appropriate if distribution is limited to

CPAs must be independent to issue a review report.

The guidance for service auditors has been moved to the attestation standards.

Which of the following is a correct statement regarding review, compilation, and preparation services?

Statements on Standards for Accounting and Review Services (SSARS) are issued by the Accounting and Review Services Committee of the AICPA.

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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