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20 terms

chapter 20

STUDY
PLAY
Which of the following professional services would be considered an attest engagement?
An engagement to report on compliance with statutory requirements
An auditor's report issued in connection with which of the following is generally not considered to be a special report?
Compliance with aspects of contractual agreements unrelated to audited statements.
When an auditor conducts an audit in accordance with generally accepted auditing standards and concludes that the financial statements are fairly presented in accordance with a comprehensive basis of accounting other than generally accepted accounting principles such as the cash basis of accounting, the auditor should issue
Special report
If the auditor believes that financial statements prepared on the entity's income tax basis are not suitably titled, the auditor should:
Modify the auditor's report to disclose any reservations
An accountant may accept an engagement to apply agreed upon procedures that are not sufficient to express an opinion on one or more specified accounts or items of a financial statement provided that:
Distribution of the accountant's report is restricted
For assurance services, independence is
Required for some services but not others
When an independent auditor reports on an examination of prospective financial statements, which of these should not be included in the report?
A statement that the CPA is independent
When providing limited assurance that the financial statements of a nonpublic entity require no material modifications to be in accordance with generally accepted accounting principles, the accountant should:
Understand the accounting principles of the industry in which the entity operates
Which of the following procedures is not usually performed by the accountant in a review engagement of a nonpublic entity?
Communicating any material weaknesses discovered during the study and evaluation of internal control.
Performing inquiry and analytical procedures is the primary basis for an accountant to issue a:
Review report on comparative financial statements for a nonpublic entity in its second year of operation.
Each page of a nonpublic entity's financial statements reviewed by an accountant should include the following reference:
See Accountant's Review Report
Given one or more hypothetical assumptions, a responsible party may prepare, to the best of its knowledge and belief, an entity's expected financial position, results of operations, and cash flows. Such prospective financial statements are known as:
Financial projections
Prospective financial information presented, given one or more hypothetical assumptions is referred to as:
Financial projection
An accountant should not submit unaudited financial statements to the management of a nonpublic company unless, at a minimum, the accountant
Complies with the standards applicable to compilation engagements.
Financial statements compiled without audit or review by an accountant should be accompanied by a report stating that
A compilation is limited to presenting in the form of financial statements information that is the representation of management
When compiling a nonpublic entity's financial statements, an accountant would be least likely to:
Issue a compilation report on one or more, but not all, of the basic financial statements
Prior to commencing the compilation of financial statements of a nonpublic entity, the accountant should
Acquire a knowledge of any specialized accounting principles and practices used in the entity's industry
Which of these is not an example of a current assurance service associated with the AICPA?
CPA WebSys
Which of these is true about assurance services?
They can either be done in conjunction with an audit or as a separate engagement
Which of these is not required in both a compilation and a review?
Understanding the entity and its environment