General
All attestation engagements require the practitioner to
A. Be independent.
B. Express a conclusion.
C. Consider financial information.
D. Collect audit evidence.
A. Be independent.
Preconditions for all attestation engagements include all of the following except
A. Be satisfied that the practitioner can be considered the responsible party.
B. Determine that the subject matter is appropriate.
C. Expect to prepare a written report.
D. Have unrestricted access to information the practitioner considers necessary.
A. Be satisfied that the practitioner can be considered the responsible party.
Which of the following statements should be included in a practitioner’s report on the application of agreed-upon procedures?
A. A statement that the practitioner performed an examination of prospective financial statements.
B. A statement of scope limitation that will qualify the practitioner’s opinion.
C. A statement referring to standards established by the AICPA.
D. A statement of negative assurance based on procedures performed.
C. A statement referring to standards established by the AICPA.
A financial forecast
A. Is based on the most conservative estimates.
B. Present estimates given one or more hypothetical assumptions.
C. Unlike a projection, may contain a range.
D. Presents expected financial position, results of operations, and cash flows.
D. Presents expected financial position, results of operations, and cash flows.
According to the AICPA Statements on Standards for Attestation Engagements, a public accounting firm should establish quality control policies to provide assurance about which of the following matters related to agreed-upon procedures engagements?
A. Use of the report is not restricted.
B. The public accounting firm takes responsibility for the sufficiency of procedures.
C. The practitioner is independent from the client and other specified parties.
D. The practitioner sets the criteria to be used in the determination of findings.
C. The practitioner is independent from the client and other specified parties.
According to the AICPA Statements on Standards for Attestation Engagements, a public accounting firm should establish quality control policies to provide assurance about which of the following matters related to agreed-upon procedures engagements?
A. Use of the report is not restricted.
B. The public accounting firm takes responsibility for the sufficiency of procedures.
C. The practitioner is independent from the client and other specified parties.
D. The practitioner sets the criteria to be used in the determination of findings.
C. The practitioner is independent from the client and other specified parties.
Which of the following components is appropriate in a practitioner’s report on the results of applying agreed-upon procedures?
A. A description of the procedures performed, as agreed to by the specified parties identified in the report.
B. A statement that management is responsible for expressing an opinion.
C. A title that includes the phrase “independent audit.”
D. A statement that the report is unrestricted in its use.
A. A description of the procedures performed, as agreed to by the specified parties identified in the report.
Which of the following examination reports on prospective financial statements is (are) appropriate for general use?
A. Both a Financial forecast and Financial projection
B. Only a Financial forecast
C. Only a Financial projection
D. Neither a Financial forecast nor Financial projection
B. Only a Financial forecast
A practitioner is engaged to express an opinion on management’s assertion that the square footage of a warehouse offered for sale is 150,000 square feet. The practitioner should refer to which of the following sources for professional guidance?
A. Statements on Auditing Standards.
B. Statements on Standards for Attestation Engagements.
C. Statements on Standards for Accounting and Review Services.
D. Statements on Standards for Consulting Services.
B. Statements on Standards for Attestation Engagements.
A practitioner is engaged to express an opinion on management’s assertion that the square footage of a warehouse offered for sale is 150,000 square feet. The practitioner should refer to which of the following sources for professional guidance?
A. Statements on Auditing Standards.
B. Statements on Standards for Attestation Engagements.
C. Statements on Standards for Accounting and Review Services.
D. Statements on Standards for Consulting Services.
B. Statements on Standards for Attestation Engagements.
A nonissuer engaged a practitioner to perform agreed-upon procedures on specified matters. The date of the practitioner’s report would ordinarily be determined by the occurrence of which of the following events?
A. The receipt of the signed engagement letter from the client.
B. The completion of the agreed-upon procedures.
C. The client’s review and approval of the contents of a draft report.
D. The delivery of the final report to the client.
B. The completion of the agreed-upon procedures.
Which of the following statements concerning prospective financial statements is true?
A. Only a financial forecast would normally be appropriate for limited use.
B. Only a financial projection would normally be appropriate for general use.
C. Any type of prospective financial statements would normally be appropriate for limited use.
D. Any type of prospective financial statements would normally be appropriate for general use.
C. Any type of prospective financial statements would normally be appropriate for limited use.
Which of the following professional services would be considered an attestation engagement?
A. Advocating on behalf of a client about trust tax matters under review by the Internal Revenue Service.
B. Providing financial analysis, planning, and capital acquisition services as a part-time, in-house controller.
C. Advising management in the selection of a computer system to meet business needs.
D. Examining the financial statements for one year in the future based on client expectations and predictions.
D. Examining the financial statements for one year in the future based on client expectations and predictions.
Which of the following professional services would be considered an attestation engagement?
A. Advocating on behalf of a client about trust tax matters under review by the Internal Revenue Service.
B. Providing financial analysis, planning, and capital acquisition services as a part-time, in-house controller.
C. Advising management in the selection of a computer system to meet business needs.
D. Examining the financial statements for one year in the future based on client expectations and predictions.
D. Examining the financial statements for one year in the future based on client expectations and predictions.
A practitioner’s report on agreed-upon procedures should contain which of the following statements?
A. The procedures performed were agreed to by the engaging party.
B. Sufficiency of procedures is the responsibility of the practitioner.
C. All classification codes appeared to comply with such performance documents.
D. Nothing came to my attention as a result of applying the procedures.
A. The procedures performed were agreed to by the engaging party.
When a CPA examines a client’s projected financial statements, the CPA’s report on these statements should
A. Explain the principal differences between historical and projected financial statements.
B. State that the CPA performed procedures to evaluate management’s assumptions.
C. Refer to the CPA’s auditor’s report on the historical financial statements.
D. Include the CPA’s opinion on the client’s ability to continue as a going concern.
B. State that the CPA performed procedures to evaluate management’s assumptions.
A CPA is required to comply with the provisions of Statements on Standards for Attestation Engagements (SSAEs) when engaged to
A. Report on financial statements that the CPA generated through the use of computer software.
B. Review management’s discussion and analysis (MD&A) prepared pursuant to rules and regulations adopted by the SEC.
C. Provide the client with a financial statement format that does not include dollar amounts.
D. Audit financial statements that the client prepared for use in another country.
B. Review management’s discussion and analysis (MD&A) prepared pursuant to rules and regulations adopted by the SEC.
A qualified opinion in an attestation examination engagement most likely is expressed when
A. Misstatements are material but not pervasive to the subject matter.
B. Evidence to support an opinion is not available.
C. Misstatements are material and pervasive to the subject matter.
D. Evidence to support an opinion is available but the practitioner is precluded from acquiring it.
A. Misstatements are material but not pervasive to the subject matter.
A practitioner has been asked to issue a report on findings as a result of performing specific agreed-upon procedures on subject matter. The practitioner
A. Must permit general use of the report.
B. Should determine that the engaging party acknowledges that the procedures are appropriate.
C. Cannot accept the engagement unless the practitioner specifies the threshold for reporting exceptions.
D. Should take responsibility for the subject matter.
B. Should determine that the engaging party acknowledges that the procedures are appropriate.
Accepting an engagement to examine an entity’s financial projection most likely would be appropriate if the projection were to be distributed to
A. All employees who work for the entity.
B. Potential shareholders who request a prospectus or a registration statement.
C. A bank with which the entity is negotiating for a loan.
D. All shareholders of record as of the report date.
C. A bank with which the entity is negotiating for a loan.