Exam 13: Other Public Accounting Services

In reporting on a nonpublic entity's internal control over financial reporting,an accountant should include a paragraph that describes the

An accountant's report includes the phrase "We are not aware".This phrase indicates

Donna Prima,CPA,was engaged to review the unaudited financial statements of Rooster Restaurants Inc.,a nonpublic company.During her review,Donna found that Rooster had not capitalized leases as required by GAAP.The result was so material,that Donna modified the standard review report to state that "the financial statements are not in conformity with GAAP." Required: Is Donna's report in accordance with professional standards? If not,what should she have done under the circumstances? Explain.

Which of the following procedures should an accountant perform during an engagement to review the financial statements of a nonpublic entity?

An auditor that is requested to provide a report on application of requirements of an appropriate financial reporting framework may not

Public accounting firms have consistently looked for additional services that might increase the profitability of the public accounting firm.To that end,CPAs can provide value to clients with assurance services. Required: A.Describe two of the services identified by the AICPA. B.Why would the public prefer to have a public accounting firm as a provider of these services? C.What are the possible negative consequences for public accounting firms if they provide services outside the realm of traditional accounting services?

For each term listed below (items 1-5)select the correct term (items A-F). A. Attestation B. Assurance Service C. Compilation D. Trust Services E. Review Service F. Service Organization ___ 1. An engagement whereby a practitioner provides limited assurance about financial information. ___ 2. A service whereby the practitioner assists in assembling financial information. ___ 3. Professional services resulting in a report on subject matter or a claim about subject matter that is the responsibility of another party. ___ 4. An entity that provides a service to another company regarding the processing of transactions or information. ___ 5. Professional services aimed at improving the quality of information both financial and non-financial for decision makers.

In an agreed-upon procedures engagement,an accountant

Enhanced Business Reporting (EBR)focuses on improving business reporting by developing a voluntary framework for presentation and disclosure of value drivers and non-financial measures of performance.The advantages of EBR include all of the following except

George Wilson is on the board of directors of a small manufacturing company,Smith Plastics Inc.George holds a CPA certificate and is a member of the AICPA.The president of the company,John Smith,has asked George to prepare financial statements for the company to be submitted to Sixth First Bank as part of a loan request.Mr.Smith tells George that the bank would like a review or an audit,but would settle for a compilation from a CPA.He would like George to do the compilation. Required: Under what conditions,if any,George Wilson would be allowed to prepare a compilation of the financial statements of Smith Plastics Inc.?

In a compilation engagement,the accountant

During a review the auditor is required to obtain written representations from management.Which of the following is NOT one of the required elements of the representation?

Delta Life Insurance Co.prepares its financial statements on an accounting basis insurance companies use pursuant to the rules of a state insurance commission.Wall,CPA,is Delta's auditor.If Wall discovers that the statements are not suitably titled,Wall should

Big Ben's Toy (BBT)Company has recently outsourced its payroll operation to Mary's Payroll Service (MPS).MPS receives the changes to the payroll data base (hirings,firings,rate increases,etc.)and the number of hours worked for all hourly employees.MPS calculates the payroll and sends BBT printed payroll checks,a payroll register,and a list of payments to be made to third parties (IRS,insurance,pension plan,etc.).BBT transfers an appropriate amount into its payroll bank account and distributes the checks.Accounts payable uses the list of third-party payments to make appropriate payments. You have been hired to perform an audit of BBT Company.During your opening meeting with BBT management you state that your audit plan includes inquiries of Mary's Payroll Service and a review of the AT 801 report on internal controls at MPS.BBT's management is confused and states that BBT should not have to pay you to review controls at another organization. Prepare a brief explanation to BBT's management as to why it is necessary to review the controls at MPS and the importance of this review to BBT Company.

This question is related to other public accounting services and reports.For each statement,description,or phrase (1-5),indicate the related type of engagement or report (A-F). A. Reviews of unaudited financial statements of a nonissuer. B. Compilations of financial statements. C. Reviews of unaudited interim financial statements of a public company. D. Reports on financial statements prepared special purpose framework. E. Reports on compliance with contractual agreements or regulatory requirements. F. Reports on elements, accounts, or items of a financial statement. ___ 1. The information should conform to the accounting principles in ASC 270, "Interim Financial Reporting." ___ 2. In our opinion, the schedule of accounts receivable referred to above presents fairly, in all material respects. ___ 3. Limited to presenting in the form of financial statements information that is the representation of management. ___ 4. As described in Note 2, these financial statements were prepared on the cash receipts and disbursements basis of accounting. ___ 5. A reasonable basis for expressing limited assurance that there are no material modifications that should be made to the statements.

Assurance services are defined as independent professional services that

A responsible party for information to subject to an attestation engagement would not include

Which of the following is NOT a principle of Trust Service engagements?

Compiled financial statements of a nonpublic entity should be accompanied by a report stating that

ABC Company prepares financial statements showing the last two years,years X and Y (Year X is the year prior to year Y).The auditor performed an audit of year X and a review of year Y.The auditor may