Exam 20: Other Assurance and Nonassurance Services

Prior to accepting an engagement to examine a financial forecast or projection included in a prospectus or other public offering document,the public accountant should

When assessing the plausibility of the financial statements for a review engagement,the auditor will use which of the following criteria for auditing a small,privately held company?

When would the public accountant conduct audit procedures during a review engagement?

Yvan is preparing the audit plan for Share the Wealth,a non-profit organization.Share the Wealth is a large Montreal-based organization that receives corporate donations and has many stores that collect and re-sell costume jewelry and clothing.The purpose of the organization is to build recreation areas for children in less-fortunate areas of the city. Share the Wealth was started by two sisters.One of the sisters is still actively involved in the organization,but the other sister has been devoting less time to the organization since she has had triplets. Share the Wealth has a total of eight stores in Montreal where individuals can drop off donations and customers can purchase the second-hand clothing and costume jewelry.Share the Wealth has a total of 12 employees who work in the various stores.Depending on the schedule and availability,the employees will randomly be assigned to a store for the week. Required: Provide three procedures that Yvan should consider when performing the review engagement of Share the Wealth.

Criteria are the benchmarks against which nonfinancial information will be evaluated while applying professional judgment during assurance engagements.According to the umbrella standards,suitable criteria should have which features?

As part of the conduct of a review engagement,which of the following would be a typical procedure used for the assessment of the ending accounts receivable balance?

Define "attestation engagements."

As part of the conduct of a review engagement,which of the following procedures would be appropriate for assessing the ending value of accounts payable?

The fact that a client has a material accounting departure for failure to follow ASPE would require the accountant to disclose that fact in a separate paragraph giving rise to the modification when the accountant is performing

A review service engagement for an accountants' association with unaudited financial statements involves which of the following?

The interim financial statements are usually

Why is it important for the review engagement report to state that the review is not an audit?

What is the title of a compilation report?

Describe the professional standards that must be followed when undertaking a compilation engagement as specified by the CPA Canada Handbook.

As part of the review engagement for a small manufacturing company,which of the following would be a typical review procedure for the sales cycle?

Define "assurance engagements."

What is an auditor's responsibility for supplementary information that is outside the basic financial statements but required by accounting guidelines?

The Federal Auditor General provides the results of operational audits to Parliament in Auditor General reports.What type of engagements are these?

Always Quick Manufacturing Limited is a small business that manufactures metal and plastic components for a variety of industries.The bulk of the business is in the computing industry,although it has occasional contracts for the automotive industry. Jose,the owner,would like to expand the business so that he can bid on larger contracts.This requires an investment of about $500 000 to finance capital assets and about $300 000 for a working capital loan.Jose has financed the business himself to this point and has been given some alternatives by the bank. The alternatives pertain to which assets are used as guarantees and whether Jose also guarantees the loans personally (as he has substantial personal assets).The bank also stated that if Jose personally guarantees the loan,the company will only require a review engagement,whereas if the loan is only secured by corporate assets,an audit of the company will be required. Jose understands the differences among the guarantees but is not sure about the difference between a review and and audit engagement.Presently,the company financial statements are prepared using a compilation engagement. Required: Explain to Jose the difference between a review and an audit engagement in the context of his present compilation engagement.

Which of the following components of an engagement letter would apply to both a review engagement and a compilation engagement?