Question 1

When performing compilation services, the accountant is not required to obtain an understanding of the client's internal control.

Accepted Answer

A) True 
 B)False

Question 2

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

Question 3

Which of the following services is performed under the attestation standards?

Accepted Answer

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

Question 4

A financial statement review conducted in compliance with SSARS includes obtaining an understanding of internal control.

Accepted Answer

A) True 
 B)False

Question 5

Auditors should provide debt compliance letters only for clients for whom the auditor has done an audit of the overall financial statements.

Accepted Answer

A) True 
 B)False

Question 6

A CPA who has been engaged to audit financial statements that were prepared on a cash basis:

Accepted Answer

A)  must ascertain that there is proper disclosure of the fact that the cash basis has been used, the general nature of material items omitted, and the net effect of such omissions. 
B)  may not be associated with such statements which are not in accordance with generally accepted accounting principles. 
C)  must render a qualified report explaining the departure from generally accepted accounting principles in the opinion paragraph. 
D)  must restate the financial statements on an accrual basis and then render the standard (short-form) report. 
A)  must ascertain that there is proper disclosure of the fact that the cash basis has been used, the general nature of material items omitted, and the net effect of such omissions. 
B)  may not be associated with such statements which are not in accordance with generally accepted accounting principles. 
C)  must render a qualified report explaining the departure from generally accepted accounting principles in the opinion paragraph. 
D)  must restate the financial statements on an accrual basis and then render the standard (short-form) report.

Question 7

WebTrust services are performed under the direction of the SSARS.

Accepted Answer

A) True 
 B)False

Question 8

A financial statement review conducted in compliance with SSARS emphasizes five activities, one of which is to "perform analytical procedures." State the other four.

Accepted Answer

• Obtain knowledge of the accounting pri

Question 9

Which of the following is not one of the general types of prospective financial statements included in the attestation standards?

Accepted Answer

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

Question 10

SSAEs are issued by the AICPA.

Accepted Answer

A) True 
 B)False

Question 11

An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that:

Accepted Answer

A)  distribution of the report is to be restricted to the specified users involved. 
B)  the prospective financial statements are also examined. 
C)  responsibility for the adequacy of the procedures performed is taken by the accountant. 
D)  negative assurance is expressed on the prospective financial statements taken as a whole. 
A)  distribution of the report is to be restricted to the specified users involved. 
B)  the prospective financial statements are also examined. 
C)  responsibility for the adequacy of the procedures performed is taken by the accountant. 
D)  negative assurance is expressed on the prospective financial statements taken as a whole.

Question 12

The concept of reasonable assurance is provided for in which one of the following engagements?

Accepted Answer

A)  review 
B)  compilation 
C)  audit 
D)  none of the above 
A)  review 
B)  compilation 
C)  audit 
D)  none of the above

Question 13

Evidence for a review engagement consists primarily of:

Accepted Answer

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

Question 14

Compilation reports may be of all but 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 15

A CPA firm can issue a compilation report even if it is not independent with respect to the client.

Accepted Answer

A) True 
 B)False

Question 16

General use statements are prepared for use by ________.

Accepted Answer

A)  known contractual parties 
B)  any third party 
C)  regulators 
D)  internal auditor 
A)  known contractual parties 
B)  any third party 
C)  regulators 
D)  internal auditor

Question 17

Debt compliance letters are ordinarily addressed to:

Accepted Answer

A)  underwriters of securities. 
B)  the client's audit committee. 
C)  creditor financial institutions. 
D)  the Securities and Exchange Commission. 
A)  underwriters of securities. 
B)  the client's audit committee. 
C)  creditor financial institutions. 
D)  the Securities and Exchange Commission.

Question 18

You are a CPA 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 performed. In performing the work, you discover that there are no invoices to support a claim for a $25,000 disbursement. The manager informs you that all the disbursements are proper. What should you do?

Accepted Answer

A)  Submit the expected statements but omit $25,000 of unsupported disbursements. 
B)  Include the unsupported disbursements in the statements since you are not expected to make an audit. 
C)  Obtain from the manager a written statement that you informed him of the missing invoices and include his assurance that the disbursements are proper. 
D)  Notify the owners that some of the claimed disbursements are unsupported and withdraw if the situation is not satisfactorily resolved. 
A)  Submit the expected statements but omit $25,000 of unsupported disbursements. 
B)  Include the unsupported disbursements in the statements since you are not expected to make an audit. 
C)  Obtain from the manager a written statement that you informed him of the missing invoices and include his assurance that the disbursements are proper. 
D)  Notify the owners that some of the claimed disbursements are unsupported and withdraw if the situation is not satisfactorily resolved.

Question 19

Define forecast and projection.

Accepted Answer

Forecasts are prospective financial stat

Question 20

The Securities and Exchange Commission requires quarterly financial information as a part of the:

Accepted Answer

A)  10-K report. 
B)  10-Q report. 
C)  8-K report. 
D)  auditor's report. 
A)  10-K report. 
B)  10-Q report. 
C)  8-K report. 
D)  auditor's report.

Exam 25: Other Assurance Services

When performing compilation services, the accountant is not required to obtain an understanding of the client's internal control.

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

Which of the following services is performed under the attestation standards?

A financial statement review conducted in compliance with SSARS includes obtaining an understanding of internal control.

Auditors should provide debt compliance letters only for clients for whom the auditor has done an audit of the overall financial statements.

A CPA who has been engaged to audit financial statements that were prepared on a cash basis:

WebTrust services are performed under the direction of the SSARS.

A financial statement review conducted in compliance with SSARS emphasizes five activities, one of which is to "perform analytical procedures." State the other four.

Which of the following is not one of the general types of prospective financial statements included in the attestation standards?

SSAEs are issued by the AICPA.

An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that:

The concept of reasonable assurance is provided for in which one of the following engagements?

Evidence for a review engagement consists primarily of:

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

A CPA firm can issue a compilation report even if it is not independent with respect to the client.

General use statements are prepared for use by ________.

Debt compliance letters are ordinarily addressed to:

Define forecast and projection.

The Securities and Exchange Commission requires quarterly financial information as a part of the:

The Demand for Audit and Other Assurance Services

The CPA Profession

Audit Reports

Professional Ethics

Legal Liability

The CPA Profession

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Section 404 Audits of Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

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 and Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls and 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 Balances

Completing the Audit

Internal and Governmental Financial Auditing and Operational Auditing

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