MOD A Connect Qs
A service whereby the practitioner assists in assembling financial information, but issues no report. Trust Services Compilation Attestation Assurance Service Service Organization Review Service Preparation of Financial Statements
Preparation of Financial Statements
An engagement whereby a practitioner provides limited assurance about financial information. Trust Services Compilation Attestation Assurance Service Service Organization Review Service Preparation of Financial Statements
Review Service
Adequate knowledge a. General b. Fieldwork c. Reporting
a
Any reservations about the engagement or the subject matter must be disclosed. a. General b. Fieldwork c. Reporting
c
The practitioner's conclusion must be stated. a. General b. Fieldwork c. Reporting
c
Exercise due professional care a. General b. Fieldwork c. Reporting
a
Adequate technical training a. General b. Fieldwork c. Reporting
a
Independence in mental attitude a. General b. Fieldwork c. Reporting
a
An accountant may allow general distribution of reports based on a. An agreed-upon-procedures engagement. b. An examination of prospective financial information. c. An examination of forecasted financial information. d. None of the choices are correct.
c
A report on sustainability, as defined by the AICPA, might include all of the following except a. economic viability. b. social responsibility. c. environmental responsibility. d. internal control over financial reporting.
d
An entity that provides a service to another company regarding the processing of transactions or information. Trust Services Compilation Attestation Assurance Service Service Organization Review Service Preparation of Financial Statements
Service organization
Work must be adequately planned and properly supervised. a. General b. Fieldwork c. Reporting
b
The subject matter must be identified. a. General b. Fieldwork c. Reporting
c
Professional services aimed at improving the quality of information both financial and non-financial for decision makers. Trust Services Compilation Attestation Assurance Service Service Organization Review Service Preparation of Financial Statements
Assurance
5. Nonpublic companies that are audited may also want interim reviews. Auditors must then follow _______. a. FASB standards b. the ASB standards c. best practices
ASB standards
Professional services resulting in a report on subject matter or a claim about subject matter that is the responsibility of another party. Trust Services Compilation Attestation Assurance Service Service Organization Review Service Preparation of Financial Statements
Attestation
A service whereby the practitioner assists in assembling financial information and issues a report providing no assurance. Trust Services Compilation Attestation Assurance Service Service Organization Review Service Preparation of Financial Statements
Compilation
4. Public company guidance comes from the ________. PCAOB a. AICPA b. FASB c. PCAOB
PCAOB
Reason to believe subject matter can be evaluated. a. General b. Fieldwork c. Reporting
a
The performance of an attestation engagement on prospective financial information does not require which of the following? a. Management must disclose the probability of obtaining the results included in the prospective financial information. b. If the basis of the prospective financial information is different than the financial statements, a reconciliation of the two must be provided. c. Management must disclose all significant assumptions used in generating the prospective financial information. d. Management must disclose significant accounting policies and procedures used in generating the prospective financial information.
a
The phrase "Trust services" refers to: a. WebTrust and SysTrust Services. b. XBRL and SysTrust Services. c. WebTrust and XBRL Services. d. all AICPA designated assurance services.
a
When accountants are not independent, which of the following reports can they nevertheless issue? a. Compilation report. b. Examination report on a forecast. c. Standard unmodified audit report. d. Examination of internal control over financial reporting.
a
When an accountant is engaged to compile a nonpublic entity's financial statements that omit substantially all disclosures required by GAAP, the accountant should indicate in the compilation report that the financial statements: a. might influence users' conclusions about the business, if the disclosures were included. b. are prepared in conformity with a comprehensive basis of accounting other than GAAP. c. are not compiled in accordance with Statements on Standards for Accounting and Review Services. d. are special-purpose financial statements that are not comparable to those of prior periods.
a
Which of the following best describes an engagement to report on an entity's internal control over financial reporting for a nonpublic company? a. An attestation engagement to examine and report on management's written assertions about the effectiveness of its internal control structure. b. An audit engagement to render an opinion on the entity's internal control structure. c. A prospective engagement to project, for a period of time not to exceed one year, and report on the expected benefits of the entity's internal control structure. d. A consulting engagement to provide constructive advice to the entity on its internal control structure.
a
2. Practitioners report either on the ______ about the subject matter or the subject matter itself. a. attestation b. assertion c. audit
assertion
A(n) ____ is a declaration about whether the subject matter is presented in accordance with certain criteria. a. attestation b. assertion c. audit
assertion
In an agreed-upon procedures engagement, an accountant: a. follows all of the fundamental principles of GAAS. b. restricts the report to specified users. c. includes negative assurance in the report. d. gives a qualified audit report.
b
Shelly's Bank has loaned money to Pete's Auto Supply. The loan is collateralized by inventory. The loan also requires a CPA to observe the count of the inventory and trace sampled items to the vendor invoices in order to determine the value of inventory is not misstated. This service would be: a. an assurance service engagement. b. an attestation engagement. c. a review engagement. d. a compilation engagement.
b
Sufficient evidence must be obtained. a. General b. Fieldwork c. Reporting
b
When a company uses a service organization to prepare its payroll, the company's auditors: a. have no obligation concerning the internal controls at the service organization. b. need to understand the internal controls over the transaction regardless of the location of the control. c. must audit the internal controls at the service organization. d. should include the audit report of the service company's auditors with their auditors' report.
b
An accountant's report includes the phrase "We are not aware". This phrase indicates: a. an attestation was not performed. b. management had not established sufficient criteria for an opinion to be issued. c. the auditor is providing negative assurance. d. a disclaimer of opinion is presented.
c
Auditors can gain sufficient understanding of the internal controls at a service organization by: a. reviewing the contract with the service organization. b. inquiry with management of the service organization. c. reviewing a report on internal controls provided by the service organization's auditors. d. sending a confirmation concerning internal controls to the service organization's auditors.
c
Compiled financial statements of a nonpublic entity should be accompanied by a report stating that: a. the scope of the accountant's procedures has not been restricted in testing the financial information that is the representation of management. b. the accountant assessed the accounting principles used and significant estimates made by management. c. the accountant does not express an opinion or any other form of assurance on the financial statements. d. a compilation consists primarily of inquiries of entity personnel and analytical procedures applied to financial data.
c
Extensible Business Reporting Language (XBRL) provides a computer readable identifying tag for each individual item of data. The advantages of XBRL include all of the following except: a. increases the speed of handling of financial data. b. reduces the chance of error. c. improves the full disclosure of financial information. d. permits automatic checking of information.
c
Hamell Corporation is making a presentation to a prospective investor. The presentation includes a projection showing that the company's sales will be between $25,000,000 and $27,000,000 within the next three years. Hamell believes the information will be better received if its CPA provides an attestation report on the projection. In order to provide such a report the CPA must do all of the following EXCEPT: a. obtain knowledge about the client's business. b. evaluate the assumptions used in preparing the projection. c. confirm expected sales with customers. d. identify key factors affecting the information.
c
If a nonissuer wants an accountant to perform an examination of its internal controls, the accountant should follow: a. FASB Concepts Statement No. 1, "Objectives of Financial Reporting by Business Enterprises." b. AICPA AU 315, "Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement." c. AICPA AT 501, "An Examination of an Entity's Internal Control over Financial Reporting That Is Integrated with an Audit of Its Financial Statements." d. PCAOB AS 2201, "An Audit of Internal Control over Financial Reporting That Is Integrated with an Audit of Financial Statements."
c
The accountant's standard report for a compilation service would not include a statement that: a. a compilation service has been performed in accordance with standards established by the AICPA. b. financial statement information is the representation of the owners of the business. c. compilation service consists primarily of inquiries of company personnel and analytical procedures applied to financial data. d. financial statements have not been audited or reviewed and the accountant does not express an opinion or any other form of assurance.
c
The report must state that it is intended only for information and use of specified parties. a. General b. Fieldwork c. Reporting
c
When providing limited assurance that the reviewed financial statements of a nonpublic entity require no material modifications to be in accordance with generally accepted accounting principles, the accountant should: a. assess the risk that a material misstatement could occur in a financial statement assertion. b. confirm with the entity's lawyer that material loss contingencies are disclosed. c. understand the accounting principles of the industry in which the entity operates. d. develop audit plans to determine whether the entity's financial statements are fairly presented.
c
Which of the following procedures would not be performed in a review of financial statements of a nonpublic company? a. Inquire about the accounting system and bookkeeping procedures. b. Perform analytical procedures to identify relationships and individual items that appear to be unusual. c. Obtain an attorney's letter regarding litigation and unasserted claims. d. Study the financial statements for indications that they conform to generally accepted accounting principles.
c
To perform an attestation engagement on prospective information or pro forma information, accountants must do all of the following except a. Obtain knowledge about the entity's business and accounting principles. b. Obtain an understanding of the process through which the information was developed. c. Evaluate the assumptions used to prepare the information. d. Understand the internal controls used in the processes that generated the information.
d
3. SSARS reviews are performed on clients that ______ an annual audit. a. do not need b. need c. want
do not need
