Question 1

An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that

Accepted Answer

A)  Distribution of the report is restricted to the specified users involved. 
B)  The prospective financial statements also are examined. 
C)  Responsibility for the adequacy of the procedures performed is taken by the accountant. 
D)  Negative assurance is expressed on the prospective financial statements taken as a whole. 
A)  Distribution of the report is restricted to the specified users involved. 
B)  The prospective financial statements also are examined. 
C)  Responsibility for the adequacy of the procedures performed is taken by the accountant. 
D)  Negative assurance is expressed on the prospective financial statements taken as a whole.

Question 2

Electronic commerce is an example of a category of assurance services.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following procedures is more likely to be performed in a review engagement of a nonpublic entity than in a compilation engagement?

Accepted Answer

A)  Gaining an understanding of the entity's business transactions. 
B)  Making a preliminary assessment of control risk. 
C)  Obtaining a representation letter from the chief executive officer. 
D)  Assisting the entity in adjusting the accounting records. 
A)  Gaining an understanding of the entity's business transactions. 
B)  Making a preliminary assessment of control risk. 
C)  Obtaining a representation letter from the chief executive officer. 
D)  Assisting the entity in adjusting the accounting records.

Question 4

The report of a CPA on a review of the financial statements of a nonpublic entity should not include a statement that

Accepted Answer

A)  All information included in the financial statements is the representation of the entity's management. 
B)  The review was performed in accordance with generally accepted auditing standards. 
C)  The CPA is not aware of any material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. 
D)  A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. 
A)  All information included in the financial statements is the representation of the entity's management. 
B)  The review was performed in accordance with generally accepted auditing standards. 
C)  The CPA is not aware of any material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. 
D)  A review consists principally of inquiries of company personnel and analytical procedures applied to financial data.

Question 5

An entity engaged a CPA to determine whether the client'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 6

Which of the following would an accountant not need to know when conducting a compilation?

Accepted Answer

A)  The accounting principles and practices of the industry in which the entity operates. 
B)  A general understanding of the nature of the entity's business transactions and the form of its accounting records. 
C)  The accounting basis on which the financial statements are to be presented. 
D)  The accountant would need to know all of the above when conducting a compilation. 
A)  The accounting principles and practices of the industry in which the entity operates. 
B)  A general understanding of the nature of the entity's business transactions and the form of its accounting records. 
C)  The accounting basis on which the financial statements are to be presented. 
D)  The accountant would need to know all of the above when conducting a compilation.

Question 7

As with most professionals,internal auditors must follow guidelines promoting ethical conduct.The IIA Code of Ethics is important for internal auditors because the reliability of their work depends on a reputation for a high level of personal integrity.The Code of Ethics consists of four main principles of ethical conduct and some associated rules that underpin the expected conduct of IIA members.List the four main principles of the Code of Ethics and explain each.

Accepted Answer

Integrity-The integrity of internal audi

Question 8

Accepting an engagement to compile a financial projection for a public company most likely would be inappropriate if the projection were to be distributed to

Accepted Answer

A)  A bank with which the entity is negotiating for a loan. 
B)  A labor union with which the entity is negotiating a contract. 
C)  The principal stockholder, to the exclusion of the other stockholders. 
D)  All stockholders of record as of the report date. 
A)  A bank with which the entity is negotiating for a loan. 
B)  A labor union with which the entity is negotiating a contract. 
C)  The principal stockholder, to the exclusion of the other stockholders. 
D)  All stockholders of record as of the report date.

Question 9

Which of the following is not an aspect of the assurances provided by a CPA WebTrust report?

Accepted Answer

A)  Product or service quality. 
B)  System availability. 
C)  Confidentiality. 
D)  Processing integrity. 
A)  Product or service quality. 
B)  System availability. 
C)  Confidentiality. 
D)  Processing integrity.

Question 10

For an auditor to examine management's assertions about the effectiveness of internal control in an attestation engagement,three conditions are necessary.Briefly explain them.

Accepted Answer

1.Management of the entity accepts respo

Question 11

Before issuing a report on the compilation of financial statements of a nonpublic entity,the accountant should

Accepted Answer

A)  Apply analytical procedures to selected financial data to discover any material misstatements. 
B)  Corroborate at least a sample of the assertions management has embodied in the financial statements. 
C)  Inquire of the client's personnel whether the financial statements omit substantially all disclosures. 
D)  Read the financial statements to consider whether the financial statements are free from obvious material errors. 
A)  Apply analytical procedures to selected financial data to discover any material misstatements. 
B)  Corroborate at least a sample of the assertions management has embodied in the financial statements. 
C)  Inquire of the client's personnel whether the financial statements omit substantially all disclosures. 
D)  Read the financial statements to consider whether the financial statements are free from obvious material errors.

Question 12

An attestation report should state that the use of the report is restricted to specified parties under all of the following circumstances except when:

Accepted Answer

A)  The criteria used to evaluate the subject matter are available only to specified parties. 
B)  The report is an attest engagement to apply agreed-upon procedures. 
C)  A written assertion on the subject matter of the report has not been provided by the responsible party. 
D)  All of the above are circumstances that would dictate that the use of the report is restricted to specific parties. 
A)  The criteria used to evaluate the subject matter are available only to specified parties. 
B)  The report is an attest engagement to apply agreed-upon procedures. 
C)  A written assertion on the subject matter of the report has not been provided by the responsible party. 
D)  All of the above are circumstances that would dictate that the use of the report is restricted to specific parties.

Question 13

In performing an attestation engagement,a CPA typically

Accepted Answer

A)  Supplies litigation support services. 
B)  Assesses control risk at a low level. 
C)  Expresses a conclusion about an assertion. 
D)  Provides management consulting advice. 
A)  Supplies litigation support services. 
B)  Assesses control risk at a low level. 
C)  Expresses a conclusion about an assertion. 
D)  Provides management consulting advice.

Question 14

When engaged to compile the financial statements of a nonpublic entity,an accountant is required to possess a level of knowledge of the entity's accounting principles and practices.This requirement most likely will include obtaining a general understanding of the

Accepted Answer

A)  Stated qualifications of the entity's accounting personnel. 
B)  Design of the entity's internal controls placed in operation. 
C)  Risk factors relating to misstatements arising from illegal acts. 
D)  Internal control awareness of the entity's senior management. 
A)  Stated qualifications of the entity's accounting personnel. 
B)  Design of the entity's internal controls placed in operation. 
C)  Risk factors relating to misstatements arising from illegal acts. 
D)  Internal control awareness of the entity's senior management.

Question 15

Absolute assurance is provided in

Accepted Answer

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

Question 16

In an examination of prospective financial statements,which of the following would not require a departure from the standard examination report?

Accepted Answer

A)  Scope limitation. 
B)  Unreasonable assumptions. 
C)  Departure from AICPA presentation guidelines. 
D)  All of the above would require a departure from the standard examination report. 
A)  Scope limitation. 
B)  Unreasonable assumptions. 
C)  Departure from AICPA presentation guidelines. 
D)  All of the above would require a departure from the standard examination report.

Question 17

Trust Service principles cover

Accepted Answer

A)  Hardware design. 
B)  Confidentiality. 
C)  Software design. 
D)  Physical protection of computer systems. 
A)  Hardware design. 
B)  Confidentiality. 
C)  Software design. 
D)  Physical protection of computer systems.

Question 18

Which of the following procedures is usually included in a review engagement of a nonpublic entity?

Accepted Answer

A)  The confirmation of accounts receivable. 
B)  A study and evaluation of internal control. 
C)  An inquiry concerning subsequent events. 
D)  The observation of physical inventory counts. 
A)  The confirmation of accounts receivable. 
B)  A study and evaluation of internal control. 
C)  An inquiry concerning subsequent events. 
D)  The observation of physical inventory counts.

Question 19

Attestation standards provide guidance for performing assurance services with respect to several types of engagements,including prospective financial statements.

Accepted Answer

A) True 
 B)False

Question 20

Responding to a question such as "What would happen if....." is an attribute of which of the following types of engagements?

Accepted Answer

A)  Financial projection. 
B)  Financial forecast. 
C)  Financial forecast and financial projection. 
D)  Review. 
A)  Financial projection. 
B)  Financial forecast. 
C)  Financial forecast and financial projection. 
D)  Review.

An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that

Electronic commerce is an example of a category of assurance services.

Which of the following procedures is more likely to be performed in a review engagement of a nonpublic entity than in a compilation engagement?

The report of a CPA on a review of the financial statements of a nonpublic entity should not include a statement that

An entity engaged a CPA to determine whether the client'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

Which of the following would an accountant not need to know when conducting a compilation?

Accepting an engagement to compile a financial projection for a public company most likely would be inappropriate if the projection were to be distributed to

Which of the following is not an aspect of the assurances provided by a CPA WebTrust report?

For an auditor to examine management's assertions about the effectiveness of internal control in an attestation engagement,three conditions are necessary.Briefly explain them.

Before issuing a report on the compilation of financial statements of a nonpublic entity,the accountant should

An attestation report should state that the use of the report is restricted to specified parties under all of the following circumstances except when:

In performing an attestation engagement,a CPA typically

When engaged to compile the financial statements of a nonpublic entity,an accountant is required to possess a level of knowledge of the entity's accounting principles and practices.This requirement most likely will include obtaining a general understanding of the

Absolute assurance is provided in

In an examination of prospective financial statements,which of the following would not require a departure from the standard examination report?

Trust Service principles cover

Which of the following procedures is usually included in a review engagement of a nonpublic entity?

Attestation standards provide guidance for performing assurance services with respect to several types of engagements,including prospective financial statements.

Responding to a question such as "What would happen if....." is an attribute of which of the following types of engagements?

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

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting 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

An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that

Electronic commerce is an example of a category of assurance services.

Which of the following procedures is more likely to be performed in a review engagement of a nonpublic entity than in a compilation engagement?

The report of a CPA on a review of the financial statements of a nonpublic entity should not include a statement that

An entity engaged a CPA to determine whether the client'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

Which of the following would an accountant not need to know when conducting a compilation?

Accepting an engagement to compile a financial projection for a public company most likely would be inappropriate if the projection were to be distributed to

Which of the following is not an aspect of the assurances provided by a CPA WebTrust report?

For an auditor to examine management's assertions about the effectiveness of internal control in an attestation engagement,three conditions are necessary.Briefly explain them.

Before issuing a report on the compilation of financial statements of a nonpublic entity,the accountant should

An attestation report should state that the use of the report is restricted to specified parties under all of the following circumstances except when:

In performing an attestation engagement,a CPA typically

When engaged to compile the financial statements of a nonpublic entity,an accountant is required to possess a level of knowledge of the entity's accounting principles and practices.This requirement most likely will include obtaining a general understanding of the

Absolute assurance is provided in

In an examination of prospective financial statements,which of the following would not require a departure from the standard examination report?

Trust Service principles cover

Which of the following procedures is usually included in a review engagement of a nonpublic entity?

Attestation standards provide guidance for performing assurance services with respect to several types of engagements,including prospective financial statements.

Responding to a question such as "What would happen if....." is an attribute of which of the following types of engagements?

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

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting 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