Question 1

Specific attestation standards have been developed in all but which of the following areas?

Accepted Answer

A)  Pro forma financial information 
B)  Compliance with laws and regulations 
C)  Prospective financial statements 
D)  Standards have been developed for all of the above. 
A)  Pro forma financial information 
B)  Compliance with laws and regulations 
C)  Prospective financial statements 
D)  Standards have been developed for all of the above. D

Question 2

If an auditor performs a compilation but lacks independence,an additional paragraph must be added which states that:
 " We are not independent with respect to XYZ Company."

Accepted Answer

A) True 
 B)False  True

Question 3

As a CPA,you have been engaged to perform an attestation engagement.You would typically:

Accepted Answer

A)  express a conclusion about an assertion. 
B)  provide management consulting services. 
C)  prepare financial forecasts to secure in preparation for receiving debt funding. 
D)  compile financial statements for the client. 
A)  express a conclusion about an assertion. 
B)  provide management consulting services. 
C)  prepare financial forecasts to secure in preparation for receiving debt funding. 
D)  compile financial statements for the client. A

Question 4

Your accounting firm has accepted a compilation engagement from a client in which your firm is not independent.In that case you:

Accepted Answer

A)  may not accept the engagement. 
B)  may accept the engagement and disclose the lack of independence. 
C)  may accept the engagement and not disclose the lack of independence. 
D)  may accept the engagement and disclose the lack of independence and the reason for the lack of independence. 
A)  may not accept the engagement. 
B)  may accept the engagement and disclose the lack of independence. 
C)  may accept the engagement and not disclose the lack of independence. 
D)  may accept the engagement and disclose the lack of independence and the reason for the lack of independence.

Question 5

The accountant's report on the examination of prospective financial statements should include a caveat that the prospective results may not be achieved.

Accepted Answer

A) True 
 B)False

Question 6

An accountant has accepted an engagement in which the audit procedures of inquiry and analytical procedures will be employed.These procedures will form the basis for issuance of:

Accepted Answer

A)  a compilation report. 
B)  audit report on supplemental information issued by the client. 
C)  management advisory report requested by the audit committee. 
D)  review report on financial statements for a nonpublic company. 
A)  a compilation report. 
B)  audit report on supplemental information issued by the client. 
C)  management advisory report requested by the audit committee. 
D)  review report on financial statements for a nonpublic company.

Question 7

Discuss the six SSARS requirements that must be met when an accountant is performing a compilation of financial statements.

Accepted Answer

The preparer of the statements must:
•Es

Question 8

Which of the following would not be included in a CPA's report based upon a review of the financial statements of a nonpublic entity?

Accepted Answer

A)  A statement that the review was in accordance with generally accepted auditing standards 
B)  A statement that all information included in the financial statements is the representation of management 
C)  A statement describing the principal procedures performed 
D)  A statement describing the auditor's conclusions based upon the results of the review 
A)  A statement that the review was in accordance with generally accepted auditing standards 
B)  A statement that all information included in the financial statements is the representation of management 
C)  A statement describing the principal procedures performed 
D)  A statement describing the auditor's conclusions based upon the results of the review

Question 9

SSAEs are issued by the AICPA.

Accepted Answer

A) True 
 B)False

Question 10

Define forecast and projection.

Accepted Answer

Forecasts are prospective financial stat

Question 11

WebTrust services are performed under the direction of the SSARS.

Accepted Answer

A) True 
 B)False

Question 12

The auditor must obtain evidence that the interim financial information agrees or reconciles with the accounting records for a public company interim review.

Accepted Answer

A) True 
 B)False

Question 13

The WebTrust service requires that a CPA update its testing of the e-commerce aspects of a entity's web site 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

Practitioners who perform reviews and compilations are referred to in the SSARS standards as:

Accepted Answer

A)  bookkeepers. 
B)  accountants. 
C)  auditors. 
D)  CPAs. 
A)  bookkeepers. 
B)  accountants. 
C)  auditors. 
D)  CPAs.

Question 15

CPAs must be independent to issue a compilation report.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements regarding prospective financial statements is most correct?

Accepted Answer

A)  CPAs are not attesting to the accuracy of the prospective financial statements. 
B)  CPAs are attesting to the accuracy of the prospective financial statements. 
C)  CPAs are performing a review on the company's assumptions and hypotheticals that underlie the prospective financial statements. 
D)  CPAs are performing a review on the achievability of the prospective financial statements. 
A)  CPAs are not attesting to the accuracy of the prospective financial statements. 
B)  CPAs are attesting to the accuracy of the prospective financial statements. 
C)  CPAs are performing a review on the company's assumptions and hypotheticals that underlie the prospective financial statements. 
D)  CPAs are performing a review on the achievability of the prospective financial statements.

Question 17

Of the three types of attestation engagements,examination engagements provide a higher level of assurance than agreed-upon procedures engagements but less than review engagements.

Accepted Answer

A) True 
 B)False

Question 18

Systrust services are performed under the direction of the SSAEs.

Accepted Answer

A) True 
 B)False

Question 19

Prospective financial statements are for general use or for limited use.General use refers to use by any third party,whereas limited use refers to use by third parties with which the responsible party is negotiating directly.Which of the following statements is not correct?

Accepted Answer

A)  Forecasts can be provided for general use. 
B)  Forecasts can be provided for limited use. 
C)  Projections can be provided for general use. 
D)  Projections can be provided for limited use. 
A)  Forecasts can be provided for general use. 
B)  Forecasts can be provided for limited use. 
C)  Projections can be provided for general use. 
D)  Projections can be provided for limited use.

Question 20

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

Exam 25: Other Assurance Services

Specific attestation standards have been developed in all but which of the following areas?

If an auditor performs a compilation but lacks independence,an additional paragraph must be added which states that: " We are not independent with respect to XYZ Company."

As a CPA,you have been engaged to perform an attestation engagement.You would typically:

Your accounting firm has accepted a compilation engagement from a client in which your firm is not independent.In that case you:

The accountant's report on the examination of prospective financial statements should include a caveat that the prospective results may not be achieved.

An accountant has accepted an engagement in which the audit procedures of inquiry and analytical procedures will be employed.These procedures will form the basis for issuance of:

Discuss the six SSARS requirements that must be met when an accountant is performing a compilation of financial statements.

Which of the following would not be included in a CPA's report based upon a review of the financial statements of a nonpublic entity?

SSAEs are issued by the AICPA.

Define forecast and projection.

WebTrust services are performed under the direction of the SSARS.

The auditor must obtain evidence that the interim financial information agrees or reconciles with the accounting records for a public company interim review.

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

Practitioners who perform reviews and compilations are referred to in the SSARS standards as:

CPAs must be independent to issue a compilation report.

Which of the following statements regarding prospective financial statements is most correct?

Of the three types of attestation engagements,examination engagements provide a higher level of assurance than agreed-upon procedures engagements but less than review engagements.

Systrust services are performed under the direction of the SSAEs.

Prospective financial statements are for general use or for limited use.General use refers to use by any third party,whereas limited use refers to use by third parties with which the responsible party is negotiating directly.Which of the following statements is not correct?

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.

The Assurance Services Market

The Audit Standards Setting Process

Audit Reports

Legal Liability Considerations for Auditors

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Implications of Information Technology for the Audit Process

Developing the Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

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 Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

Internal and Governmental Financial Auditing and Operational Auditing

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