Question 1

When conducting a review engagement,how is materiality calculated?

Accepted Answer

A) materiality is not calculated as a lower level of assurance is being provided 
B) the concept of significance is used,rather than the concept of materiality 
C) always as a percentage of net income before income taxes 
D) in the same manner as an audit engagement 
A) materiality is not calculated as a lower level of assurance is being provided 
B) the concept of significance is used,rather than the concept of materiality 
C) always as a percentage of net income before income taxes 
D) in the same manner as an audit engagement

Question 2

A review engagement requires what amount of evidence to be accumulated?

Accepted Answer

A) minimal 
B) moderate 
C) extensive 
D) maximum 
A) minimal 
B) moderate 
C) extensive 
D) maximum

Question 3

Identify the reporting standards for compilation engagements.

Accepted Answer

•state that the public accountant compil

Question 4

As part of a loan agreement that it is thinking of obtaining,Always Quick Manufacturing Limited has decided that it will use accounts receivable and inventory as security for working capital funds.The bank has indicated that in addition to an annual financial statement audit,it would require quarterly assurance on the accounts receivable and inventory amounts.The type of assurance required has not been stated.The bank has told Jose,the owner of the company,that he would need to provide a detailed inventory list and an aged accounts receivable trial balance on the fifteenth of each month for the information as at the preceding month end.Jose would like to know what his alternatives are.
Required:
Your partner is going to meet with Jose next week and would like you to prepare a memo to file that will be used as part of the meeting.Draft a brief memo that includes a list of alternative types of engagements that could be used to provide assurance on the accounts receivable and inventory balances.

Accepted Answer

1.Review of Financial Information other

Question 5

Richard is performing a compilation engagement.Richard is concerned that the information is

Accepted Answer

A) arithmetically correct. 
B) accurate. 
C) complete. 
D) in accordance with ASPE. 
A) arithmetically correct. 
B) accurate. 
C) complete. 
D) in accordance with ASPE.

Question 6

A compilation presents information,in the form of financial statements,that is the representation of management.The public accountant who prepares the compilation undertakes to express

Accepted Answer

A) limited assurance on the statements. 
B) minimal assurance on the statements. 
C) no assurance on the statements. 
D) full assurance on the statements. 
A) limited assurance on the statements. 
B) minimal assurance on the statements. 
C) no assurance on the statements. 
D) full assurance on the statements.

Question 7

A financial statement review emphasizes four broad areas,one of which is to "perform analytical procedures." State the other three areas emphasized.

Accepted Answer

•Obtain knowledge of the client's busine

Question 8

What is the purpose of an auditor reporting on the effectiveness of internal control over financial reporting?

Accepted Answer

A) To attest to the effectiveness and efficiency of internal controls at an organization. 
B) To state an opinion on management's assessment of the effectiveness of internal controls. 
C) To provide an alternative to the operational audits conducted by internal auditors. 
D) To state that the controls are in conformity with standards with respect to internal controls. 
A) To attest to the effectiveness and efficiency of internal controls at an organization. 
B) To state an opinion on management's assessment of the effectiveness of internal controls. 
C) To provide an alternative to the operational audits conducted by internal auditors. 
D) To state that the controls are in conformity with standards with respect to internal controls.

Question 9

Thermos Inc.is having its financial statements audited by Pilott & Levy,a PA firm.Leon Levy is the auditor in charge of the audit.The accountable party in this assurance engagement is

Accepted Answer

A) Leon Levy. 
B) Pilott & Levy. 
C) management of Thermos Inc. 
D) the board of directors of Thermos Inc. 
A) Leon Levy. 
B) Pilott & Levy. 
C) management of Thermos Inc. 
D) the board of directors of Thermos Inc.

Question 10

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

Accepted Answer

A) discussion with management with respect to the costing method used 
B) observation of the inventory count 
C) observation of the warehouse,paying particular attention to dusty and damaged goods 
D) confirmation with customers that are holding consignment inventory with respect to quantity and condition of the inventory 
A) discussion with management with respect to the costing method used 
B) observation of the inventory count 
C) observation of the warehouse,paying particular attention to dusty and damaged goods 
D) confirmation with customers that are holding consignment inventory with respect to quantity and condition of the inventory

Question 11

A review engagement includes

Accepted Answer

A) obtaining an understanding of the internal controls. 
B) tests of controls or transactions. 
C) inquiry,analytical procedures,and discussion. 
D) independent confirmation or physical examination. 
A) obtaining an understanding of the internal controls. 
B) tests of controls or transactions. 
C) inquiry,analytical procedures,and discussion. 
D) independent confirmation or physical examination.

Question 12

You are a public accountant 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 made.In performing the work,you discover that there are no invoices to support $25 000 of the manager's claimed disbursements.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) Obtain further information about the $25 000 of unsupported items 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) Obtain further information about the $25 000 of unsupported items and withdraw if the situation is not satisfactorily resolved.

Question 13

Which of the following techniques would be conducted by a practitioner when conducting a review of compliance with agreements and regulations?

Accepted Answer

A) use of a specialist to ensure that the terms of the agreement are complied with 
B) inquiring about how the client monitors its compliance with the provisions 
C) testing control procedures throughout the year that pertain to the provisions of the agreement 
D) discussing with client's legal counsel to identify any legal liabilities with respect to potential violations of the agreements 
A) use of a specialist to ensure that the terms of the agreement are complied with 
B) inquiring about how the client monitors its compliance with the provisions 
C) testing control procedures throughout the year that pertain to the provisions of the agreement 
D) discussing with client's legal counsel to identify any legal liabilities with respect to potential violations of the agreements

Question 14

The Locker Building is a new apartment building in a Vancouver suburb.In order to receive a subsidy from the municipality,it needs to prove that it has complied with the city's new rules about "green efficiency." The "green efficiency" rules are described on the municipality's website and list the requirements a building must meet to be considered green and efficient.Your firm,with the help of an environmental scientist,has been asked to perform a direct reporting engagement for the Locker Building.The suitable criteria in this case are the

Accepted Answer

A) green efficiency rules. 
B) auditor's judgment. 
C) environmental scientist's judgment. 
D) federal environmental laws. 
A) green efficiency rules. 
B) auditor's judgment. 
C) environmental scientist's judgment. 
D) federal environmental laws.

Question 15

You have just recently become a member of your local non-profit housing co-op by moving into the largest unit.The board of directors has asked that you handle the review engagement but you are concerned about independence.What is a practical way for you to stay in the co-op but also perform the review engagement?

Accepted Answer

A) Request a bylaw stating that the accountant cannot vote for board members. 
B) Do a compilation rather than a review engagement. 
C) Have all the preparation work for the review engagement completed by a board member. 
D) Include a paragraph in the review engagement report stating that you are not independent. 
A) Request a bylaw stating that the accountant cannot vote for board members. 
B) Do a compilation rather than a review engagement. 
C) Have all the preparation work for the review engagement completed by a board member. 
D) Include a paragraph in the review engagement report stating that you are not independent.

Question 16

In addition to having modifications of wording for the financial statement audit opinion,other types of opinions can have modifications as well.Which of the following describes a situation where there would be a qualification or disclaimer of opinion for a direct reporting engagement?

Accepted Answer

A) The subject matter does not conform to the criteria. 
B) The information is not presented fairly. 
C) The practitioner conducted alternative procedures where there was a scope limitation. 
D) The practitioner and management disagree about the content of the report. 
A) The subject matter does not conform to the criteria. 
B) The information is not presented fairly. 
C) The practitioner conducted alternative procedures where there was a scope limitation. 
D) The practitioner and management disagree about the content of the report.

Question 17

Which of the following procedures would most likely be conducted by an accountant during a compilation engagement?

Accepted Answer

A) Enquire of management with respect to the purpose of new capital assets. 
B) Compare gross profit on a year-by-year basis over the last five years. 
C) Circularize negative accounts receivable confirmations. 
D) Assemble and recalculate the financial statement allocations. 
A) Enquire of management with respect to the purpose of new capital assets. 
B) Compare gross profit on a year-by-year basis over the last five years. 
C) Circularize negative accounts receivable confirmations. 
D) Assemble and recalculate the financial statement allocations.

Question 18

The level of assurance that is provided by the public accountant on a compilation report is

Accepted Answer

A) none. 
B) low. 
C) medium. 
D) high. 
A) none. 
B) low. 
C) medium. 
D) high.

Question 19

Which of the following is a professional standard that must be followed by an accountant when conducting a compilation engagement?

Accepted Answer

A) work being adequately planned and properly executed 
B) having adequate technical training and proficiency in auditing 
C) obtaining an adequate understanding of the business and its industry 
D) documenting the processes used to compile and record transactions 
A) work being adequately planned and properly executed 
B) having adequate technical training and proficiency in auditing 
C) obtaining an adequate understanding of the business and its industry 
D) documenting the processes used to compile and record transactions

Question 20

What is meant by limited assurance?

Accepted Answer

Limited assurance is the level of assura

When conducting a review engagement,how is materiality calculated?

A review engagement requires what amount of evidence to be accumulated?

Identify the reporting standards for compilation engagements.

Richard is performing a compilation engagement.Richard is concerned that the information is

A compilation presents information,in the form of financial statements,that is the representation of management.The public accountant who prepares the compilation undertakes to express

A financial statement review emphasizes four broad areas,one of which is to "perform analytical procedures." State the other three areas emphasized.

What is the purpose of an auditor reporting on the effectiveness of internal control over financial reporting?

Thermos Inc.is having its financial statements audited by Pilott & Levy,a PA firm.Leon Levy is the auditor in charge of the audit.The accountable party in this assurance engagement is

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

A review engagement includes

Which of the following techniques would be conducted by a practitioner when conducting a review of compliance with agreements and regulations?

In addition to having modifications of wording for the financial statement audit opinion,other types of opinions can have modifications as well.Which of the following describes a situation where there would be a qualification or disclaimer of opinion for a direct reporting engagement?

Which of the following procedures would most likely be conducted by an accountant during a compilation engagement?

The level of assurance that is provided by the public accountant on a compilation report is

Which of the following is a professional standard that must be followed by an accountant when conducting a compilation engagement?

What is meant by limited assurance?

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Professional Ethics and Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Client Acceptance,Planning,and Materiality

Assessing the Risk of Material Misstatement

Internal Control and COSO Framework

Assessing Control Risk and Designing Test of Controls

Develop Risk Response: Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Filters

Exam 20: Other Assurance and Nonassurance Services

When conducting a review engagement,how is materiality calculated?

A review engagement requires what amount of evidence to be accumulated?

Identify the reporting standards for compilation engagements.

Richard is performing a compilation engagement.Richard is concerned that the information is

A compilation presents information,in the form of financial statements,that is the representation of management.The public accountant who prepares the compilation undertakes to express

A financial statement review emphasizes four broad areas,one of which is to "perform analytical procedures." State the other three areas emphasized.

What is the purpose of an auditor reporting on the effectiveness of internal control over financial reporting?

Thermos Inc.is having its financial statements audited by Pilott & Levy,a PA firm.Leon Levy is the auditor in charge of the audit.The accountable party in this assurance engagement is

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

A review engagement includes

Which of the following techniques would be conducted by a practitioner when conducting a review of compliance with agreements and regulations?

In addition to having modifications of wording for the financial statement audit opinion,other types of opinions can have modifications as well.Which of the following describes a situation where there would be a qualification or disclaimer of opinion for a direct reporting engagement?

Which of the following procedures would most likely be conducted by an accountant during a compilation engagement?

The level of assurance that is provided by the public accountant on a compilation report is

Which of the following is a professional standard that must be followed by an accountant when conducting a compilation engagement?

What is meant by limited assurance?

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Professional Ethics and Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Client Acceptance,Planning,and Materiality

Assessing the Risk of Material Misstatement

Internal Control and COSO Framework

Assessing Control Risk and Designing Test of Controls

Develop Risk Response: Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Acquisition and Payment Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Filters