Question 1

Distribution of which of the following types of reports is limited?

Accepted Answer

A)  audit 
B)  review 
C)  agreed-upon procedures 
D)  examination 
A)  audit 
B)  review 
C)  agreed-upon procedures 
D)  examination

Question 2

Draft a report that would be appropriate when an independent accountant has performed a compilation of financial statements which substantially omits all disclosures and the statement of cash flows required by GAAP.

Accepted Answer

We have compiled the accompanying balanc

Question 3

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

Accepted Answer

The preparer of the statements must:
• E

Question 4

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 5

Draft a report that would be appropriate when an independent accountant has performed a compilation of financial statements with disclosures in accordance with GAAP.

Accepted Answer

We have compiled the accompanying balanc

Question 6

An auditor who was engaged to perform an examination of the financial statements of a nonpublic entity has been asked by the client to refrain from performing various audit procedures and change the nature of the engagement to a review of the financial statements in accordance with standards established by the AICPA. The client's request was made because the cost to complete the examination was significant. Under these circumstances, the auditor would most likely:

Accepted Answer

A)  qualify the auditor's report and refer to the scope limitation. 
B)  view the request as an indication of a possible irregularity. 
C)  complete the examination that was in progress. 
D)  honor the client's request. 
A)  qualify the auditor's report and refer to the scope limitation. 
B)  view the request as an indication of a possible irregularity. 
C)  complete the examination that was in progress. 
D)  honor the client's request.

Question 7

Briefly describe a SysTrust engagement.

Accepted Answer

A SysTrust licensed accountant evaluates

Question 8

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 9

The standards which govern the CPA's association with unaudited financial statements of private companies 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 10

For compilations, an accountant does which of the following?

Accepted Answer

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

Question 11

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 12

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 13

Statements on Standards for Attestation Engagements are established by the:

Accepted Answer

A)  Securities and Exchange Commission. 
B)  Public Company Accounting Oversight Board. 
C)  Auditing Standards Board. 
D)  Accounting and Review Services Committee. 
A)  Securities and Exchange Commission. 
B)  Public Company Accounting Oversight Board. 
C)  Auditing Standards Board. 
D)  Accounting and Review Services Committee.

Question 14

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 15

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 limited 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 limited assurance that the financial statements are fairly presented.

Question 16

The two types of services provided in connection with the Statements on Standards for Accounting and Review Services are:

Accepted Answer

A)  audit and examination services. 
B)  compilation and review services. 
C)  examination and review services. 
D)  management advisory services and compilations. 
A)  audit and examination services. 
B)  compilation and review services. 
C)  examination and review services. 
D)  management advisory services and compilations.

Question 17

Discuss each of the three types of compilation reports and the circumstances in which each should be used.

Accepted Answer

• Compilation with full disclosure. This

Question 18

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 19

The examination of prospective financial statements contains four elements that comprise the examination. List the four elements below.

Accepted Answer

1. Evaluate the preparation of the prosp

Question 20

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

Exam 25: Other Assurance Services

Distribution of which of the following types of reports is limited?

Draft a report that would be appropriate when an independent accountant has performed a compilation of financial statements which substantially omits all disclosures and the statement of cash flows required by GAAP.

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

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

Draft a report that would be appropriate when an independent accountant has performed a compilation of financial statements with disclosures in accordance with GAAP.

Briefly describe a SysTrust engagement.

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

The standards which govern the CPA's association with unaudited financial statements of private companies are the:

For compilations, an accountant does which of the following?

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

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:

Statements on Standards for Attestation Engagements are established by the:

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?

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

The two types of services provided in connection with the Statements on Standards for Accounting and Review Services are:

Discuss each of the three types of compilation reports and the circumstances in which each should be used.

Reports on agreed-upon procedures are intended to be distributed:

The examination of prospective financial statements contains four elements that comprise the examination. List the four elements below.

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.

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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