Question 1

Which of the following procedures would not be performed in a review of the financial statements of a private company?

Accepted Answer

A) Enquire about the accounting system and bookkeeping procedures. 
B) Perform analytical procedures to identify relationships and individual items that appear to be unusual. 
C) Obtain a lawyer's letter about claims and possible claims. 
D) Study the financial statements for indications that they conform to generally accepted accounting principles. 
A) Enquire about the accounting system and bookkeeping procedures. 
B) Perform analytical procedures to identify relationships and individual items that appear to be unusual. 
C) Obtain a lawyer's letter about claims and possible claims. 
D) Study the financial statements for indications that they conform to generally accepted accounting principles.

Question 2

Which of the following procedures should an accountant perform during an engagement to review the financial statements of a private company?

Accepted Answer

A) Communicate internal control system weaknesses that were discovered during the assessment of control risk. 
B) Obtain a letter of representation signed by top-level management. 
C) Send bank confirmations to the company's financial institutions. 
D) Examine cash disbursements in the subsequent period for evidence of unrecorded liabilities. 
A) Communicate internal control system weaknesses that were discovered during the assessment of control risk. 
B) Obtain a letter of representation signed by top-level management. 
C) Send bank confirmations to the company's financial institutions. 
D) Examine cash disbursements in the subsequent period for evidence of unrecorded liabilities.

Question 3

When should reviews of interim financial information be performed?

Accepted Answer

review procedures should be performed at

Question 4

An accountant's communication on the financial statements in a compilation engagement would NOT include a statement that ________.

Accepted Answer

A) the statements may not be appropriate for the purposes of users 
B) the financial statement information has been compiled 
C) a compilation engagement consists primarily of inquiries of company personnel and analytical procedures applied to financial data 
D) financial statements have not been audited or reviewed and the accountant did not attempt to verify accuracy or completeness. 
A) the statements may not be appropriate for the purposes of users 
B) the financial statement information has been compiled 
C) a compilation engagement consists primarily of inquiries of company personnel and analytical procedures applied to financial data 
D) financial statements have not been audited or reviewed and the accountant did not attempt to verify accuracy or completeness.

Question 5

Auditing standards apply to work on all audited financial statements but not to work on other assurance engagements.

Accepted Answer

A) True 
 B)False

Question 6

Ordinarily,which of the following procedures should be applied when an independent accountant conducts a review of interim financial information of a publicly held company?

Accepted Answer

A) Verify changes in key account balances. 
B) Read the minutes of the board of directors' meetings. 
C) Inspect the open purchase order file. 
D) Perform cutoff tests for cash receipts and disbursements. 
A) Verify changes in key account balances. 
B) Read the minutes of the board of directors' meetings. 
C) Inspect the open purchase order file. 
D) Perform cutoff tests for cash receipts and disbursements.

Question 7

The primary purpose for the development of standards by the Criteria of Control Committee was to ________.

Accepted Answer

A) provide guidance for companies developing best practice control systems 
B) provide a basis similar to GAAP for reporting on controls 
C) provide detailed tests of controls for audits of financial statements 
D) provide clarity on who is responsible for controls 
A) provide guidance for companies developing best practice control systems 
B) provide a basis similar to GAAP for reporting on controls 
C) provide detailed tests of controls for audits of financial statements 
D) provide clarity on who is responsible for controls

Question 8

An auditor is most concerned that interim financial statements are not misleading relative to ________.

Accepted Answer

A) the prior year's interim financial statements 
B) the annual report 
C) pro forma financial statements 
D) the prior year's annual financial statements 
A) the prior year's interim financial statements 
B) the annual report 
C) pro forma financial statements 
D) the prior year's annual financial statements

Question 9

Reviews of interim financial information consist primarily of ________.

Accepted Answer

A) substantive procedures 
B) recalculation 
C) external confirmations 
D) enquiry and analytical procedures 
A) substantive procedures 
B) recalculation 
C) external confirmations 
D) enquiry and analytical procedures

Question 10

The scope of a review engagement is ________.

Accepted Answer

A) similar to that of an audit 
B) less than that of a compilation 
C) less than that of an audit 
D) more than that of an audit 
A) similar to that of an audit 
B) less than that of a compilation 
C) less than that of an audit 
D) more than that of an audit

Question 11

Under CICA rules,the auditor verifies the accuracy of management's internal controls statement just as he or she verifies the accuracy of financial statements.

Accepted Answer

A) True 
 B)False

Question 12

An accountant who is not independent can compile financial statements for a private company as long as the fact of lack of independence is disclosed in the body of the report.

Accepted Answer

A) True 
 B)False

Question 13

Donna Prima,PA,was engaged to review the financial statements of Rooster Restaurants,Inc. ,a private company.During her review,Donna found that Rooster had not capitalized leases as required under GAAP.The result was so material,that Donna modified the standard review report to state that "the financial statements are not in accordance with GAAP."
Required:
Is Prima's report in accordance with professional standards? If not,what should she have done under the circumstances? Explain.

Accepted Answer

Prima's report is not strictly in accord

Question 14

The scope of a review engagement is similar to that of an audit.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements about a compilation engagement is NOT true?

Accepted Answer

A) The accountant must have adequate technical training and proficiency in accounting. 
B) The accountant does not have to have an objective state of mind. 
C) The statements must comply with generally accepted accounting principles. 
D) The accountant should adequately plan and properly execute the work. 
A) The accountant must have adequate technical training and proficiency in accounting. 
B) The accountant does not have to have an objective state of mind. 
C) The statements must comply with generally accepted accounting principles. 
D) The accountant should adequately plan and properly execute the work.

Question 16

If an accountant is engaged to compile the financial statements of a private entity and the statements omit substantially all disclosures required by GAAP,which of the following alternatives is correct?

Accepted Answer

A) If the accountant concludes that the omissions result in misleading financial statements and the matter cannot be resolved,the accountant should withdraw from the engagement. 
B) The report should be amended to state that the financial statements have been prepared in accordance with a comprehensive basis of accounting other than GAAP. 
C) The report should be amended to state that the financial statements have not been compiled in accordance with standards for compilation and review engagements. 
D) The report should indicate that the statements are special-purpose financial statements that are not comparable to those of prior periods. 
A) If the accountant concludes that the omissions result in misleading financial statements and the matter cannot be resolved,the accountant should withdraw from the engagement. 
B) The report should be amended to state that the financial statements have been prepared in accordance with a comprehensive basis of accounting other than GAAP. 
C) The report should be amended to state that the financial statements have not been compiled in accordance with standards for compilation and review engagements. 
D) The report should indicate that the statements are special-purpose financial statements that are not comparable to those of prior periods.

Question 17

Auditors are obligated to search for "reportable matters."

Accepted Answer

A) True 
 B)False

Question 18

XYZ Ltd.has prepared financial statements that are not in accordance with GAAP.The review report should ________.

Accepted Answer

A) ensure that the nature of the departure is described in the notes 
B) contain a reservation describing the nature of the departure from GAAP 
C) be a standard review report,since a review is not an audit 
D) indicate the dollar effect of restatement for each account affected 
A) ensure that the nature of the departure is described in the notes 
B) contain a reservation describing the nature of the departure from GAAP 
C) be a standard review report,since a review is not an audit 
D) indicate the dollar effect of restatement for each account affected

Question 19

A review engagement consists primarily of enquiry,analytical procedures,and discussion.

Accepted Answer

A) True 
 B)False

Question 20

When unaudited financial statements are presented in comparative form with audited financial statements,such statements should be ________.

Accepted Answer

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

Which of the following procedures would not be performed in a review of the financial statements of a private company?

Which of the following procedures should an accountant perform during an engagement to review the financial statements of a private company?

When should reviews of interim financial information be performed?

An accountant's communication on the financial statements in a compilation engagement would NOT include a statement that ________.

Auditing standards apply to work on all audited financial statements but not to work on other assurance engagements.

Ordinarily,which of the following procedures should be applied when an independent accountant conducts a review of interim financial information of a publicly held company?

The primary purpose for the development of standards by the Criteria of Control Committee was to ________.

An auditor is most concerned that interim financial statements are not misleading relative to ________.

Reviews of interim financial information consist primarily of ________.

The scope of a review engagement is ________.

Under CICA rules,the auditor verifies the accuracy of management's internal controls statement just as he or she verifies the accuracy of financial statements.

An accountant who is not independent can compile financial statements for a private company as long as the fact of lack of independence is disclosed in the body of the report.

The scope of a review engagement is similar to that of an audit.

Which of the following statements about a compilation engagement is NOT true?

If an accountant is engaged to compile the financial statements of a private entity and the statements omit substantially all disclosures required by GAAP,which of the following alternatives is correct?

Auditors are obligated to search for "reportable matters."

XYZ Ltd.has prepared financial statements that are not in accordance with GAAP.The review report should ________.

A review engagement consists primarily of enquiry,analytical procedures,and discussion.

When unaudited financial statements are presented in comparative form with audited financial statements,such statements should be ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters

Exam 17: Other Public Accounting Services and Reportsreviews and Compilations

Which of the following procedures would not be performed in a review of the financial statements of a private company?

Which of the following procedures should an accountant perform during an engagement to review the financial statements of a private company?

When should reviews of interim financial information be performed?

An accountant's communication on the financial statements in a compilation engagement would NOT include a statement that ________.

Auditing standards apply to work on all audited financial statements but not to work on other assurance engagements.

Ordinarily,which of the following procedures should be applied when an independent accountant conducts a review of interim financial information of a publicly held company?

The primary purpose for the development of standards by the Criteria of Control Committee was to ________.

An auditor is most concerned that interim financial statements are not misleading relative to ________.

Reviews of interim financial information consist primarily of ________.

The scope of a review engagement is ________.

Under CICA rules,the auditor verifies the accuracy of management's internal controls statement just as he or she verifies the accuracy of financial statements.

An accountant who is not independent can compile financial statements for a private company as long as the fact of lack of independence is disclosed in the body of the report.

The scope of a review engagement is similar to that of an audit.

Which of the following statements about a compilation engagement is NOT true?

If an accountant is engaged to compile the financial statements of a private entity and the statements omit substantially all disclosures required by GAAP,which of the following alternatives is correct?

Auditors are obligated to search for "reportable matters."

XYZ Ltd.has prepared financial statements that are not in accordance with GAAP.The review report should ________.

A review engagement consists primarily of enquiry,analytical procedures,and discussion.

When unaudited financial statements are presented in comparative form with audited financial statements,such statements should be ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters