Deck 20: Attest and Assurance Services, and Related Reports

Question 1

An accountant should present the results of applying agreed-upon procedures to specific subject matter in the form of a report of procedures and findings.

Answer 1

True

Question 2

Concepts of risk and materiality are new to auditors but the concept of risk and materiality are rarely not applied to discussions of independence.

Answer 2

False

Question 3

As decision-makers place more reliance in IT to support their decision-making needs, they have lesser needs for assurance on systems and controls.

Answer 3

False

Question 4

SSARS is available to both public and nonpublic entities.

Question 5

An engagement to express an opinion on specified elements, accounts, or items may be made in conjunction with the audit of the financial statements or in a separate engagement.

Question 6

The board of directors, which has more day-to-day experience working with an entity, would like assurance about the entity's business risks because this service might provide leading indicators of an entity's eventual financial performance.

Question 7

The application of agreed-upon procedures constitutes an audit.

Question 8

In the United States a WebTrust engagement is performed as an assurance engagement.

Question 9

GAAS requires the auditor to obtain an understanding of internal control, however, obtaining an understanding of internal control is not applicable in all attest engagements.

Question 10

CPAs have traditionally been deliberate and focused on standards.

Question 11

Attestation services are independent professional services that improve the quality of information or its context, for decision-makers.

Question 12

SysTrust reports will always cover a historical period of time as opposed to a point in time.

Question 13

An example of CPA services that would be considered attest engagements is tax engagements in which a practitioner is engaged to prepare tax returns or provide tax advice.

Question 14

Negative assurance states that "nothing came to our attention which would indicate that the company is not in compliance."

Question 15

Independence is embedded in the definition of assurance services.

Question 16

The definition of attest engagements given is SSAE 1 requires that the assertion be in writing.

Question 17

Attestation standards and GAAS are classified into three categories: general, fieldwork, and reporting.

Question 18

SSARS stands for Statements of Standards for Accounting and Revenue Services.

Question 19

SysTrust was developed jointly by the AICPA and the CICA to provide a high level of assurance about system reliability.

Question 20

Assurance services focus on those who make decisions based on information and use the CPA's output to make decisions.

Question 21

A financial forecast is based on one or more hypothetical courses of action.

Question 22

Under the balanced scorecard approach an entity develops goals and performance measures in each of three areas.

Question 23

CPA Performance View is a system that merges the standard financial measures with leading indicators.

Question 24

In the balanced scorecard approach to performance measurement, the goal of product quality relates to the:

A) innovation perspective.
B) financial perspective.
C) managerial perspective.
D) internal perspective.
E) customer perspective.

Question 25

The auditor's special report on financial statements prepared on an OCBOA should contain all of the following except:

A) an introductory paragraph.
B) a scope paragraph.
C) an exclusion paragraph.
D) an explanatory paragraph.
E) an opinion paragraph.

Question 26

The SSARS review service was originally developed as a lower-cost and lower-assurance alternative to an audit of the financial statements of public entities.

Question 27

The basic levels of assurance are as follows except:

A) audit or examination-level assurance.
B) complete assurance.
C) review-level assurance.
D) agreed-upon assurance.
E) no assurance.

Question 28

Which one of the following is not identified as an Attest Service?

A) Management's assertion about internal control.
B) Agreed-upon procedure engagements.
C) A forecast.
D) A compilation of financial statements.
E) SysTrust.

Question 29

Whether the system is protected against unauthorized physical and logical access defines:

A) system security.
B) system availability.
C) system integrity.
D) system verifiability.
E) system maintainability.

Question 30

The CPA should consider attestation risk the same way he or she would consider audit risk.

Question 31

Whether the entity maintains effective controls to provide reasonable assurance that customers' transactions using e-commerce are completed and billed as agreed defines:

A) transaction integrity.
B) information protection.
C) risk assessment.
D) performance measurement.
E) ElderCare services.

Question 32

In performing an attest engagement, a CPA performs all of the following except:

A) relies on management statements.
B) gathers evidence to support the assertions.
C) objectively assesses the measurements of assertions.
D) objectively assesses the communications of the individual making the assertions.
E) reports the findings.

Question 33

Whether the entity maintains effective controls to provide reasonable assurance that private customer information obtained as a result of e-commerce is protected from uses not related to the entity's business defines:

A) transaction integrity.
B) information protection.
C) risk assessment.
D) performance measurement.
E) ElderCare services.

Question 34

The purpose of a CPA Elder Care engagement is to assure family members that elderly relatives no longer able to be totally independent are receiving the type of care they need.

Question 35

The compilation engagement is directed at assisting management in the preparation of financial information as well as providing assurance about whether the information is free of material misstatement.

Question 36

In the balanced scorecard approach to performance measurement, the goal of manufacturing efficiency relates to the:

A) innovation perspective.
B) financial perspective.
C) managerial perspective.
D) internal perspective.
E) customer perspective.

Question 37

All organizations have performance measurement systems.

Question 38

Whether the system processing is complete, accurate, timely, and authorized defines:

A) system security.
B) system availability.
C) system maintainability.
D) system verifiability.
E) system integrity.

Question 39

The recommendations in a consulting engagement are measured against established criteria such as GAAP, OCBOA, or COSO standards on internal controls.

Question 40

In a consulting engagement independence is required.

Question 41

SysTrust principles are classified as:
A.Availability
B.Security
C.Integrity
D.Maintainability
REQUIRED: Indicate the principle to which each of the following definitions pertains by using the code letters abovE._____
The system is available for operation and use at times set forth in the service level statements or agreements.
_____

Question 42

Briefly describe three other important forces that are changing the current environment for accounting and auditing services.

Question 43

SysTrust principles are classified as:
A.Availability
B.Security
C.Integrity
D.Maintainability
REQUIRED: Indicate the principle to which each of the following definitions pertains by using the code letters abovE._____
Systems processing is complete, accurate, timely, and authorized.

Question 44

Balanced scorecard goals are classified as:
A.Customer Perspective
B.Internal Perspective
C.Innovation Perspective
D.Financial Perspective
REQUIRED: Indicate the goal to which each of the following measures pertains by using the code letters above.

1.Product cycle time

2.Cash flow generation

3.Percent of revenues from new products

4.Measure of on-time delivery

Question 45

Briefly identify the clients and discuss how the clients would benefit from the following services: CPA WebTrust, CPA SysTrust, risk assessment services, performance measurement services, and ElderCare services. Use the following format.

Question 46

In regard to CPA Elder Care services, ensuring that expected revenues are received relates to:

A) insurance services.
B) assurance services.
C) consulting services.
D) indirect services.
E) direct services.

Question 47

Best practices in approaching risk management include the following steps except:

A) identify risks.
B) calculate revenue losses from risks.
C) analyze and assess risks.
D) design strategies for managing risk.
E) measure, monitor and report risks.

Question 48

In regard to CPA Elder Care services, reviewing and reporting on financial transactions relate to:

A) insurance services.
B) assurance services.
C) consulting services.
D) indirect services.
E) direct services.

Question 49

Complete the comparison of attest, assurance, and consulting services shown below.

Question 50

List five key information technology (IT) trends identified by the AICPA Special Committee on Assurance Services.

Question 51

Traditional performance tracking methods focus on all of the following except:

A) sales.
B) net income.
C) needed information to anticipate the future.
D) gross margin.
E) return on assets.

Question 52

Complete the schedule of SysTrust principles and criteria shown below.

Question 53

In the balanced scorecard approach to performance measurement, the goal of product innovation relates to the:

A) financial perspective.
B) internal perspective.
C) managerial perspective.
D) innovation perspective.
E) customer perspective.

Question 54

In the balanced scorecard approach to performance measurement, revenue goals relate to the:

A) financial perspective.
B) internal perspective.
C) managerial perspective.
D) innovation perspective.
E) customer perspective.

Question 55

SysTrust principles are classified as:
A.Availability
B.Security
C.Integrity
D.Maintainability
REQUIRED: Indicate the principle to which each of the following definitions pertains by using the code letters abovE._____
The system is protected against unauthorized physical and logical access.
_____

Question 56

SysTrust principles are classified as:
A.Availability
B.Security
C.Integrity
D.Maintainability
REQUIRED: Indicate the principle to which each of the following definitions pertains by using the code letters abovE._____
The can be updated when required in a manner that continues to provide for system availability, security, and integrity.
_____

Question 57

Organizations that manage risk well are more likely to achieve or exceed their objectives because they have the capacity and ability to do all of the following except:

A) identify and exploit opportunities.
B) identify and manage risks that could affect achieving their objectives.
C) make good decisions quickly.
D) respond and adapt to unexpected events.
E) all of the above.

Question 58

The attestation standards provide guidance on assessing inherent risk for all of the following except:

A) fraud.
B) control.
C) detection.
D) all of the above.
E) none of the above.