Question 1

Who developed the WebTrust service? Briefly explain this service.

Accepted Answer

WebTrust was developed jointly by the AI

Question 2

Auditors frequently audit statements prepared on bases other than GAAP. Discuss four commonly used bases other than GAAP.

Accepted Answer

• Cash or modified cash basis. With the

Question 3

CPAs must be independent to issue a compilation report.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not an element of examining a forecast?

Accepted Answer

A)  evaluating the preparation of the prospective financial statements 
B)  understanding internal controls 
C)  evaluating the support underlying the assumptions 
D)  issuing an examination report 
A)  evaluating the preparation of the prospective financial statements 
B)  understanding internal controls 
C)  evaluating the support underlying the assumptions 
D)  issuing an examination report

Question 5

Systrust services are performed under the direction of the SSAEs.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

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

Question 7

SSARS are issued by the SEC.

Accepted Answer

A) True 
 B)False

Question 8

The use of positive assurance is appropriate in review reports.

Accepted Answer

A) True 
 B)False

Question 9

What is the best reason that standards prohibit accepting an engagement on a projection for general use?

Accepted Answer

A)  The CPA's procedures would violate SSARS. 
B)  Reports on projections are not well understood by the general public. 
C)  Underlying hypothetical assumptions are difficult to interpret without obtaining additional information. 
D)  The CPA is not qualified to report on the use of GAAP in the projected financial statement. 
A)  The CPA's procedures would violate SSARS. 
B)  Reports on projections are not well understood by the general public. 
C)  Underlying hypothetical assumptions are difficult to interpret without obtaining additional information. 
D)  The CPA is not qualified to report on the use of GAAP in the projected financial statement.

Question 10

Professional standards prohibit which one of the following types of engagements for prospective financial statements from being undertaken?

Accepted Answer

A)  a compilation 
B)  a review 
C)  an examination 
D)  an agreed-upon procedures engagement 
A)  a compilation 
B)  a review 
C)  an examination 
D)  an agreed-upon procedures engagement

Question 11

Draft a report that would be appropriate when an accountant has performed a compilation of financial statements with disclosures in accordance with GAAP, but the accountant is not independent with respect to the client.

Accepted Answer

We have compiled the accompanying balanc

Question 12

A primary concern in reporting on a comprehensive basis is to make sure that the statements clearly indicate that they are prepared on a basis other than GAAP.

Accepted Answer

A) True 
 B)False

Question 13

Which are prospective financial statements that present an entity's financial position, results of operations, and cash flows, to the best of the responsible party's knowledge and belief, given one or more hypothetical assumptions?

Accepted Answer

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

Question 14

Current professional standards prohibit accountants from performing engagements to review forecasts or projections.

Accepted Answer

A) True 
 B)False

Question 15

In which type of report would you read the following statement: "We believe that our examination provides a reasonable basis for our opinion."?

Accepted Answer

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

Question 16

State four types of assurance services that fall within the auditing standards but are not audits, reviews, or compilations of financial statements in accordance with GAAP.

Accepted Answer

• Other comprehensive basis of

Question 17

Negative assurance is not permissible in:

Accepted Answer

A)  reports based upon a review engagement. 
B)  letters required by security underwriters for data pertinent to SEC registration statements. 
C)  reports based on an audit of interim financial statements of a closely held business entity. 
D)  reports relating to the results of agreed-upon procedures to one or more specified elements, accounts, or items of financial statement. 
A)  reports based upon a review engagement. 
B)  letters required by security underwriters for data pertinent to SEC registration statements. 
C)  reports based on an audit of interim financial statements of a closely held business entity. 
D)  reports relating to the results of agreed-upon procedures to one or more specified elements, accounts, or items of financial statement.

Question 18

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 19

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 20

Which of the following forms of review are permissible under SSARS?

Accepted Answer

A)  review without positive assurance 
B)  review on financial statements that omit substantially all disclosures 
C)  reviews without CPA independence 
D)  review without limited procedures 
A)  review without positive assurance 
B)  review on financial statements that omit substantially all disclosures 
C)  reviews without CPA independence 
D)  review without limited procedures

Exam 25: Other Assurance Services

Who developed the WebTrust service? Briefly explain this service.

Auditors frequently audit statements prepared on bases other than GAAP. Discuss four commonly used bases other than GAAP.

CPAs must be independent to issue a compilation report.

Which of the following is not an element of examining a forecast?

Systrust services are performed under the direction of the SSAEs.

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

SSARS are issued by the SEC.

The use of positive assurance is appropriate in review reports.

What is the best reason that standards prohibit accepting an engagement on a projection for general use?

Professional standards prohibit which one of the following types of engagements for prospective financial statements from being undertaken?

Draft a report that would be appropriate when an accountant has performed a compilation of financial statements with disclosures in accordance with GAAP, but the accountant is not independent with respect to the client.

A primary concern in reporting on a comprehensive basis is to make sure that the statements clearly indicate that they are prepared on a basis other than GAAP.

Which are prospective financial statements that present an entity's financial position, results of operations, and cash flows, to the best of the responsible party's knowledge and belief, given one or more hypothetical assumptions?

Current professional standards prohibit accountants from performing engagements to review forecasts or projections.

In which type of report would you read the following statement: "We believe that our examination provides a reasonable basis for our opinion."?

State four types of assurance services that fall within the auditing standards but are not audits, reviews, or compilations of financial statements in accordance with GAAP.

Negative assurance is not permissible in:

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

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

Which of the following forms of review are permissible under SSARS?

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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