module A

An engagement in which accountants perform procedures delineated by the entity is referred to as a(n): A. Agreed-upon procedures engagement. B. Evaluation engagement. C. Attestation engagement. D. Preparation engagement.

A. Agreed-upon procedures engagement.

Which of the following best describes an engagement to report on a non-issuer's internal control over financial reporting? A. An attestation engagement to examine and report on management's written assertions about the effectiveness of its internal control over financial reporting. B. A consulting engagement to provide constructive advice to the entity on its internal control over financial reporting. C. An engagement to project and report on the expected benefits of the entity's internal control over financial reporting. D. An audit engagement to render an opinion on the entity's internal control over financial reporting.

A. An attestation engagement to examine and report on management's written assertions about the effectiveness of its internal control over financial reporting.

Which of the following is not a condition that must be met for an attestation engagement related to compliance: A. Auditors must also conduct an audit engagement on the client's financial statements. B. Management must accept responsibility for compliance. C. Compliance must be capable of evaluation and measurement against reasonable criteria. D. Sufficient evidence must be available to support management's evaluation of compliance.

A. Auditors must also conduct an audit engagement on the client's financial statements.

Which of the following procedures is ordinarily performed by an accountant in a compilation engagement of a non-issuer? A. Reading the financial statements to consider whether they are free of obvious mistakes in the application of accounting principles. B. Applying analytical procedures designed to corroborate management's assertions that are embodied in the financial statement components. C. Making inquiries of management concerning actions taken at meetings of the stockholders and the board of directors. D. Obtaining written representations from management indicating that the compiled financial statements will not be used to obtain credit.

A. Reading the financial statements to consider whether they are free of obvious mistakes in the application of accounting principles.

An accountants' report includes the phrase "We are not aware". This phrase indicates: A. the accountants are providing limited assurance. B. an attestation engagement was not performed. C. management had not established sufficient criteria to allow an opinion to be expressed. D. the accountants are expressing a disclaimer of opinion.

A. the accountants are providing limited assurance.

If broker-dealers file an exemption report from compliance with SEC reporting requirements, accountants may perform a(n): A. Audit examination. B. Review engagement. C. Agreed-upon procedures engagement. D. Preparation engagement.

B. Review engagement.

In the audit of an issuer, an SOC 1 Type 2 report (as opposed to an SOC 1 Type 1 report) would normally be obtained because: A. The entity is required to file financial statements with the Securities and Exchange Commission. B. The entity has multiple subsidiaries that require audit attention. C. Controls are being implemented at a location physically separate from the issuer. D. The entity is required to have an auditor's report on internal control over financial reporting.

B. The entity has multiple subsidiaries that require audit attention.

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 financial projection. In order to provide such a report the CPA must do all of the following except: A. identify key factors affecting the information. B. confirm expected sales with customers. C. evaluate the assumptions used in preparing the projection. D. obtain knowledge about the client's business.

B. confirm expected sales with customers.

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: A. notify the client that prior-year audited financial statements cannot be presented when the current year's statements have not been audited. B. report on the year Y review and reissue the year X audit report. C. provide only the report concerning the year Y review. D. reissue the year X audit report with an explanatory paragraph disclosing that only a review was performed on year Y.

B. report on the year Y review and reissue the year X audit report.

The party in an attestation engagement who provides an assertion with respect to information is the: A. Limited party. B. Responsible party. C. Asserting party. D. Attesting party.

C. Asserting party.

Which of the following account titles would not be appropriate for a company that prepared its financial statements using the tax basis of accounting? A. Statement of Change in Partners' Capital Accounts. B. Statement of Revenue and Expenses. C. Balance Sheet. D. Statement of Assets, Liabilities, and Owner's Equity.

C. Balance Sheet.

Which of the following is not true if auditors are requested to express an opinion on the fairness of a non-issuers' balance sheet? A. The auditors' procedures will be limited only to those related to the balance sheet. B. The auditors' opinion will be limited to the balance sheet and will not reference the remaining financial statements. C. The auditors must refuse to accept the engagement if originally engaged to issue an opinion on the complete financial statements and would have expressed an adverse opinion on those financial statements. D. The auditors must conduct the engagement in accordance with generally accepted auditing standards.

C. The auditors must refuse to accept the engagement if originally engaged to issue an opinion on the complete financial statements and would have expressed an adverse opinion on those financial statements.

Assurance services are defined as independent professional services that: A. develop efficient and effective accounting systems to ensure compliance with accounting standards and policy. B. establish criteria for effective measurement of business activity. C. improve the quality of information, or its context, for decision makers. D. attest to the adequacy of controls over business operations.

C. improve the quality of information, or its context, for decision makers.

In a compilation engagement: A. an auditor provides only limited assurance. B. financial statements must be presented in prescribed forms. C. managers or owners may choose to omit all the footnote disclosures. D. all appropriate disclosures must be presented.

C. managers or owners may choose to omit all the footnote disclosures.

Compiled financial statements for a non-issuer 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. a compilation consists primarily of inquiries of entity personnel and analytical procedures applied to financial data. C. the accountant does not express an opinion or any other form of assurance on the financial statements. D. 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.

Which of the following would not be an appropriate reporting option for financial statements prepared using a special purpose framework? A. A qualified opinion because of a circumstance-imposed scope limitation. B. An adverse opinion because of a departure from the accounting principles of the special purpose framework. C. A qualified opinion because of a departure from the accounting principles of the special purpose framework. D. A disclaimer of opinion because of the failure of the entity to use generally accepted accounting principles.

D. A disclaimer of opinion because of the failure of the entity to use generally accepted accounting principles.

If an entity prepares financial statements that omit footnote disclosures required by generally accepted accounting principles, the accountants' compilation report should: A. Express a qualified or adverse opinion on the financial statements (depending upon the pervasiveness of the effects of the omitted disclosures) and reference the omitted disclosures. B. Express an unmodified opinion on the financial statements and reference the omitted disclosures. C. Disclaim an opinion or assurance on the financial statements without referencing the omitted disclosures. D. Disclaim an opinion or assurance on the financial statements and reference the omitted disclosures.

D. Disclaim an opinion or assurance on the financial statements and reference the omitted disclosures.

The accountant's report in an agreed-upon procedures engagement: A. Identifies the minimum required level of procedures for an agreed-upon procedures engagement. B. Expresses an opinion on the adequacy of procedures performed by the accountant. C. Indicates that the accountant(s) are responsible for the scope of the engagement. D. Disclaims an opinion or conclusion on the matter subject to the engagement.

D. Disclaims an opinion or conclusion on the matter subject to the engagement.