Question 1

The statement that "We are not aware of any material modifications that should be made to the accompanying financial statements" expresses which of the following?

Accepted Answer

A)  disclaimer of an opinion 
B)  negative assurance 
C)  negative confirmation 
D)  shared opinion

Question 2

A review results in a conclusion that represents ________ assurance.

Accepted Answer

A)  limited assurance 
B)  negative 
C)  positive 
D)  unequivocal

Question 3

What type of SOC report is intended to meet the needs of entities that use service organizations and their auditors, who are responsible for understanding internal controls over financial reporting at service organizations?

Accepted Answer

A)  SOC 1 report 
B)  SOC 2 report 
C)  SOC 3 report 
D)  none of the above

Question 4

Which of the following is not one of the five Trust Services categories?

Accepted Answer

A)  security 
B)  confidentiality 
C)  completeness 
D)  availability

Question 5

For compilation reports, if the client fails to follow accounting standards, the accountant must include the same modifications in the compilation report that are used in the review report.

Accepted Answer

A) True 
 B)False

Question 6

Which are prospective financial statements that present an entity's expected financial position, results of operations, and cash flows, to the best of the responsible party's knowledge and belief?

Accepted Answer

A)   
B)   
C)   
D)

Question 7

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. 
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 8

The assurance provided in a preparation, compilation, or review engagement is considerably below that of audits. As a result, less evidence is required for these services and they are provided at the same amount of fees as an audit.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true regarding review and audit services?

Accepted Answer

A)  A review requires more substantive evidence than an audit. 
B)  An audit requires less evidence related to internal control than a review. 
C)  A review requires less evidence than an audit. 
D)  None of the above statements is true.

Question 10

Discuss the six Statements on Standards for Accounting and Review Services (SSARS) requirements that must be met when an accountant is performing a compilation of financial statements.

Accepted Answer

The answer of Discuss the six Statements on Standards for...

Question 11

When a CPA performs an examination engagement under the attestation standards, the amount of evidence gathered is ________ and the level of assurance is ________.

Accepted Answer

A)  extensive; varying 
B)  significant; high 
C)  extensive; high 
D)  significant; moderate

Question 12

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 13

A CPA firm can issue a compilation report

Accepted Answer

A)  only if the partners are independent. 
B)  only if all the partners and the staff in the office performing the engagement are independent. 
C)  if the partners have no material or direct immaterial interest in client. 
D)  even if it is not independent.

Question 14

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

Accepted Answer

A)   
B)   
C)   
D)

Question 15

Which of the following is not an accurate statement regarding agreed-upon procedures engagements?

Accepted Answer

A)  These engagements are also known as procedures and findings engagements. 
B)  A report for such an engagement describes the findings resulting from the procedures, but cannot describe the procedures agreed upon. 
C)  All agreed-upon procedure engagements are now under the scope of attestation standards. 
D)  Agreed-upon procedures engagements appeal to CPAs because management, or a third-party user, specifies the procedures they want done.

Question 16

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

Question 17

A public company interim review includes five requirements for review service engagements. Name these five requirements.

Accepted Answer

The answer of A public company interim review includes five...

Question 18

The last paragraph of the accountant's review report

Accepted Answer

A)  details the responsibilities of management. 
B)  details the responsibilities of the accountant. 
C)  expresses limited assurance in the form of negative assurance. 
D)  lists the analytical procedures performed.

Question 19

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 20

In a review service where the client has failed to follow applicable accounting standards, the accountant is

Accepted Answer

A)  not required to determine the effect of a departure if management has not done so, but that fact must be disclosed in the report. 
B)  required to determine the effect of a departure if management has not done so, and that fact must be disclosed in the report. 
C)  not required to determine the effect of a departure if management has not done so, and that fact need not be disclosed in the report. 
D)  required to determine the effect of a departure if management has not done so, and that fact need not be disclosed in the report.

Exam 25: Other Assurance Services

The statement that "We are not aware of any material modifications that should be made to the accompanying financial statements" expresses which of the following?

A review results in a conclusion that represents ________ assurance.

What type of SOC report is intended to meet the needs of entities that use service organizations and their auditors, who are responsible for understanding internal controls over financial reporting at service organizations?

Which of the following is not one of the five Trust Services categories?

For compilation reports, if the client fails to follow accounting standards, the accountant must include the same modifications in the compilation report that are used in the review report.

Which are prospective financial statements that present an entity's expected financial position, results of operations, and cash flows, to the best of the responsible party's knowledge and belief?

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

The assurance provided in a preparation, compilation, or review engagement is considerably below that of audits. As a result, less evidence is required for these services and they are provided at the same amount of fees as an audit.

Which of the following statements is true regarding review and audit services?

Discuss the six Statements on Standards for Accounting and Review Services (SSARS) requirements that must be met when an accountant is performing a compilation of financial statements.

When a CPA performs an examination engagement under the attestation standards, the amount of evidence gathered is and the level of assurance is .

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.

A CPA firm can issue a compilation report

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

Which of the following is not an accurate statement regarding agreed-upon procedures engagements?

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."

A public company interim review includes five requirements for review service engagements. Name these five requirements.

The last paragraph of the accountant's review report

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.

In a review service where the client has failed to follow applicable accounting standards, the accountant is