Question 1

Which of the following procedures is not included in a review engagement of a nonpublic entity?

Accepted Answer

A)  Inquiries of management. 
B)  Inquiries regarding significant events subsequent to the balance sheet date. 
C)  Any procedures designed to identify relationships among data that appear to be unusual. 
D)  A study and evaluation of internal control. 
A)  Inquiries of management. 
B)  Inquiries regarding significant events subsequent to the balance sheet date. 
C)  Any procedures designed to identify relationships among data that appear to be unusual. 
D)  A study and evaluation of internal control.

Question 2

Match the Trust Services Principle with its proper definition.

Accepted Answer

The answer of Match the Trust Services Principle with its...

Question 3

Which of the following statements best describes the guidance developed by the AICPA related to WebTrust services?

Accepted Answer

A)  The Trust Services principles require the CPA to focus exclusively on the financial information presented on a website. 
B)  Once earned, the WebTrust seal can remain on a website until the entity controlling the site informs the CPA that the information on the site has changed. 
C)  In performing a WebTrust assurance engagement, a CPA does not have to consider auditing or attestation standards. 
D)  The Trust Services principles provide a broad set of criteria that guide practitioners in testing and evaluating websites. 
A)  The Trust Services principles require the CPA to focus exclusively on the financial information presented on a website. 
B)  Once earned, the WebTrust seal can remain on a website until the entity controlling the site informs the CPA that the information on the site has changed. 
C)  In performing a WebTrust assurance engagement, a CPA does not have to consider auditing or attestation standards. 
D)  The Trust Services principles provide a broad set of criteria that guide practitioners in testing and evaluating websites.

Question 4

Statements on Standards for Accounting and Review Services establish standards and procedures for which of the following engagements?

Accepted Answer

A)  Assisting in adjusting the books of account for a partnership. 
B)  Examining prospective financial statements. 
C)  Processing financial data for clients of other accounting firms. 
D)  Compiling an individual's personal financial statement to be used to obtain a mortgage. 
A)  Assisting in adjusting the books of account for a partnership. 
B)  Examining prospective financial statements. 
C)  Processing financial data for clients of other accounting firms. 
D)  Compiling an individual's personal financial statement to be used to obtain a mortgage.

Question 5

Inquiry and analytical procedures ordinarily performed during a review of a nonpublic entity's financial statements include

Accepted Answer

A)  Analytical procedures designed to identify material weaknesses in internal control. 
B)  Inquiries concerning actions taken at meetings of the stockholders and the board of directors. 
C)  Analytical procedures designed to test the accounting records by obtaining corroborating evidential matter. 
D)  Inquiries of knowledgeable outside parties such as the entity's attorneys and bankers. 
A)  Analytical procedures designed to identify material weaknesses in internal control. 
B)  Inquiries concerning actions taken at meetings of the stockholders and the board of directors. 
C)  Analytical procedures designed to test the accounting records by obtaining corroborating evidential matter. 
D)  Inquiries of knowledgeable outside parties such as the entity's attorneys and bankers.

Question 6

Which of the following procedures is not usually performed by the accountant during a review engagement of a nonpublic entity?

Accepted Answer

A)  Inquiry about actions taken at meetings of the board of directors that may affect the financial statements. 
B)  Issuance of a report stating that the review was performed in accordance with standards established by the AICPA. 
C)  Reading of the financial statements to determine if they conform with generally accepted accounting principles. 
D)  Communication of any material weaknesses discovered during the consideration of internal control. 
A)  Inquiry about actions taken at meetings of the board of directors that may affect the financial statements. 
B)  Issuance of a report stating that the review was performed in accordance with standards established by the AICPA. 
C)  Reading of the financial statements to determine if they conform with generally accepted accounting principles. 
D)  Communication of any material weaknesses discovered during the consideration of internal control.

Question 7

Match the attestation standard with the generally accepted auditing standard that is most similar in nature.

Accepted Answer

The answer of Match the attestation standard with the generally...

Question 8

Which of the following should not be included in an accountant's standard report based upon the compilation of an entity's financial statements?

Accepted Answer

A)  A statement that a compilation is limited to presenting, in the form of financial statements, information that is the representation of management. 
B)  A statement that the compilation was performed in accordance with standards established by the American Institute of CPAs. 
C)  A statement that the accountant has not audited or reviewed the financial statements. 
D)  A statement that the accountant does not express an opinion but expresses only limited assurance on the financial statements. 
A)  A statement that a compilation is limited to presenting, in the form of financial statements, information that is the representation of management. 
B)  A statement that the compilation was performed in accordance with standards established by the American Institute of CPAs. 
C)  A statement that the accountant has not audited or reviewed the financial statements. 
D)  A statement that the accountant does not express an opinion but expresses only limited assurance on the financial statements.

Question 9

Prior to commencing the compilation of financial statements of a nonpublic entity, the accountant should

Accepted Answer

A)  Perform analytical procedures sufficient to determine whether fluctuations among account balances appear reasonable. 
B)  Complete the preliminary phase of the study and evaluation of the entity's internal control. 
C)  Verify that the financial information supplied by the entity agrees with the books of original entry and supporting documentation. 
D)  Acquire a knowledge of any specialized accounting principles and practices used in the entity's industry. 
A)  Perform analytical procedures sufficient to determine whether fluctuations among account balances appear reasonable. 
B)  Complete the preliminary phase of the study and evaluation of the entity's internal control. 
C)  Verify that the financial information supplied by the entity agrees with the books of original entry and supporting documentation. 
D)  Acquire a knowledge of any specialized accounting principles and practices used in the entity's industry.

Question 10

An entity engaged a CPA to determine whether the entity's websites meet defined criteria for standard business practices and controls over transaction integrity and information protection. In performing this engagement, the CPA should comply with the provisions of

Accepted Answer

A)  Statements on Assurance Standards. 
B)  Statements on Standards for Attestation Engagements. 
C)  Statements on Standards for Management Consulting Services. 
D)  Statements on Auditing Standards. 
A)  Statements on Assurance Standards. 
B)  Statements on Standards for Attestation Engagements. 
C)  Statements on Standards for Management Consulting Services. 
D)  Statements on Auditing Standards.

Question 11

Compilations provide which of the following types of assurance about the fair presentation of financial statements?

Accepted Answer

A)  No assurance. 
B)  Negative assurance. 
C)  Limited assurance. 
D)  Reasonable assurance. 
A)  No assurance. 
B)  Negative assurance. 
C)  Limited assurance. 
D)  Reasonable assurance.

Question 12

Which of the following is the authoritative body designated to promulgate attestation standards for nonpublic entities?

Accepted Answer

A)  AICPA (Auditing Standards Board). 
B)  Governmental Accounting Standards Board. 
C)  Financial Accounting Standards Board. 
D)  General Accounting Office. 
A)  AICPA (Auditing Standards Board). 
B)  Governmental Accounting Standards Board. 
C)  Financial Accounting Standards Board. 
D)  General Accounting Office.

Question 13

During an engagement to review the financial statements of a nonpublic entity, an accountant becomes aware of a material departure from GAAP. If the accountant decides to modify the standard review report because management will not revise the financial statements, the accountant should

Accepted Answer

A)  Express negative assurance on the accounting principles that do not conform with GAAP. 
B)  Disclose the departure from GAAP in a separate paragraph of the report. 
C)  Issue an adverse or an "except for" qualified opinion, depending on materiality. 
D)  Express positive assurance on the accounting principles that conform with GAAP. 
A)  Express negative assurance on the accounting principles that do not conform with GAAP. 
B)  Disclose the departure from GAAP in a separate paragraph of the report. 
C)  Issue an adverse or an "except for" qualified opinion, depending on materiality. 
D)  Express positive assurance on the accounting principles that conform with GAAP.

Question 14

Accepting an engagement to examine an entity's financial projections would most likely be appropriate if distribution of the projections were limited to

Accepted Answer

A)  The general public on the entity's website. 
B)  Potential stockholders who request a prospectus or a registration statement. 
C)  A bank with which the entity is negotiating for a loan. 
D)  All stockholders of record as of the report date. 
A)  The general public on the entity's website. 
B)  Potential stockholders who request a prospectus or a registration statement. 
C)  A bank with which the entity is negotiating for a loan. 
D)  All stockholders of record as of the report date.

Question 15

Limited assurance is provided in

Accepted Answer

A)  An audit engagement. 
B)  A compilation engagement. 
C)  A review engagement. 
D)  None of the items listed. 
A)  An audit engagement. 
B)  A compilation engagement. 
C)  A review engagement. 
D)  None of the items listed.

Question 16

An accountant is required to comply with the provisions of Statements on Standards for Accounting and Review Services when I. Typing client-prepared financial statements, without modification, as an accommodation to a client.
II) Preparing standard monthly journal entries for depreciation and expiration of prepaid expenses.

Accepted Answer

A)  I only. 
B)  II only. 
C)  Both I and II. 
D)  Neither I nor II. 
A)  I only. 
B)  II only. 
C)  Both I and II. 
D)  Neither I nor II.

Question 17

Which of the following conditions is necessary for a practitioner to accept an attest engagement to examine and report on an entity's internal control over financial reporting?

Accepted Answer

A)  The practitioner anticipates relying on the entity's internal control in a financial statement audit. 
B)  Management accepts responsibility for the effectiveness of internal control. 
C)  The practitioner is a continuing auditor who previously has audited the entity's financial statements. 
D)  Management agrees not to present the practitioner's report in a general-use document to stockholders. 
A)  The practitioner anticipates relying on the entity's internal control in a financial statement audit. 
B)  Management accepts responsibility for the effectiveness of internal control. 
C)  The practitioner is a continuing auditor who previously has audited the entity's financial statements. 
D)  Management agrees not to present the practitioner's report in a general-use document to stockholders.

Question 18

The party responsible for assumptions identified in the preparation of prospective financial statements is usually

Accepted Answer

A)  A third-party lending institution. 
B)  The entity's management. 
C)  The reporting accountant. 
D)  The entity's independent auditor. 
A)  A third-party lending institution. 
B)  The entity's management. 
C)  The reporting accountant. 
D)  The entity's independent auditor.

Question 19

Which of the following are prospective financial statements upon which an accountant may appropriately report for general use?

Accepted Answer

A)  Pro forma financial statements. 
B)  Financial projections. 
C)  Partial presentations. 
D)  Financial forecasts. 
A)  Pro forma financial statements. 
B)  Financial projections. 
C)  Partial presentations. 
D)  Financial forecasts.

Question 20

An accountant's compilation report on a financial forecast should include a statement that the

Accepted Answer

A)  Compilation does not include evaluation of the assumptions underlying the forecast. 
B)  Hypothetical assumptions used in the forecast are reasonable. 
C)  Range of assumptions selected is one in which one end of the range is less likely to occur than the other. 
D)  Prospective statements are limited to presenting, in the form of a forecast, information that is the accountant's representation. 
A)  Compilation does not include evaluation of the assumptions underlying the forecast. 
B)  Hypothetical assumptions used in the forecast are reasonable. 
C)  Range of assumptions selected is one in which one end of the range is less likely to occur than the other. 
D)  Prospective statements are limited to presenting, in the form of a forecast, information that is the accountant's representation.

Which of the following procedures is not included in a review engagement of a nonpublic entity?

Match the Trust Services Principle with its proper definition.

Which of the following statements best describes the guidance developed by the AICPA related to WebTrust services?

Statements on Standards for Accounting and Review Services establish standards and procedures for which of the following engagements?

Inquiry and analytical procedures ordinarily performed during a review of a nonpublic entity's financial statements include

Which of the following procedures is not usually performed by the accountant during a review engagement of a nonpublic entity?

Match the attestation standard with the generally accepted auditing standard that is most similar in nature.

Which of the following should not be included in an accountant's standard report based upon the compilation of an entity's financial statements?

Prior to commencing the compilation of financial statements of a nonpublic entity, the accountant should

An entity engaged a CPA to determine whether the entity's websites meet defined criteria for standard business practices and controls over transaction integrity and information protection. In performing this engagement, the CPA should comply with the provisions of

Compilations provide which of the following types of assurance about the fair presentation of financial statements?

Which of the following is the authoritative body designated to promulgate attestation standards for nonpublic entities?

During an engagement to review the financial statements of a nonpublic entity, an accountant becomes aware of a material departure from GAAP. If the accountant decides to modify the standard review report because management will not revise the financial statements, the accountant should

Accepting an engagement to examine an entity's financial projections would most likely be appropriate if distribution of the projections were limited to

Limited assurance is provided in

Which of the following conditions is necessary for a practitioner to accept an attest engagement to examine and report on an entity's internal control over financial reporting?

The party responsible for assumptions identified in the preparation of prospective financial statements is usually

Which of the following are prospective financial statements upon which an accountant may appropriately report for general use?

An accountant's compilation report on a financial forecast should include a statement that the

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financing Investing Process: Prepaid Expenses Intangible Assets and Property Plant and Equipment

Auditing the Financing Investing Process: Long-Term Liabilities Stockholders Equity and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct, Independence, and Quality Control

Legal Liability

Filters

Exam 21: Assurance, Attestation, and Internal Auditing Services

Which of the following procedures is not included in a review engagement of a nonpublic entity?

Match the Trust Services Principle with its proper definition.

Which of the following statements best describes the guidance developed by the AICPA related to WebTrust services?

Statements on Standards for Accounting and Review Services establish standards and procedures for which of the following engagements?

Inquiry and analytical procedures ordinarily performed during a review of a nonpublic entity's financial statements include

Which of the following procedures is not usually performed by the accountant during a review engagement of a nonpublic entity?

Match the attestation standard with the generally accepted auditing standard that is most similar in nature.

Which of the following should not be included in an accountant's standard report based upon the compilation of an entity's financial statements?

Prior to commencing the compilation of financial statements of a nonpublic entity, the accountant should

An entity engaged a CPA to determine whether the entity's websites meet defined criteria for standard business practices and controls over transaction integrity and information protection. In performing this engagement, the CPA should comply with the provisions of

Compilations provide which of the following types of assurance about the fair presentation of financial statements?

Which of the following is the authoritative body designated to promulgate attestation standards for nonpublic entities?

During an engagement to review the financial statements of a nonpublic entity, an accountant becomes aware of a material departure from GAAP. If the accountant decides to modify the standard review report because management will not revise the financial statements, the accountant should

Accepting an engagement to examine an entity's financial projections would most likely be appropriate if distribution of the projections were limited to

Limited assurance is provided in

Which of the following conditions is necessary for a practitioner to accept an attest engagement to examine and report on an entity's internal control over financial reporting?

The party responsible for assumptions identified in the preparation of prospective financial statements is usually

Which of the following are prospective financial statements upon which an accountant may appropriately report for general use?

An accountant's compilation report on a financial forecast should include a statement that the

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financing Investing Process: Prepaid Expenses Intangible Assets and Property Plant and Equipment

Auditing the Financing Investing Process: Long-Term Liabilities Stockholders Equity and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct, Independence, and Quality Control

Legal Liability

Filters