How many paragraphs does the standard review report for U.S. nonpublic companies or development stage companies have?

How many paragraphs does the standard review report for U.S. nonpublic companies or development stage companies have?

a. One.
b. Two.
c. Three.
d. Four.








Answer: C

Which one of the following procedures is not a standard procedure when performing a review?

Which one of the following procedures is not a standard procedure when performing a review?

a. Assess the internal control over financial reporting.
b. Read the financial statements to determine whether they appear to conform to GAAP.
c. Obtain or prepare a trial balance of the general ledger and foot and reconcile it to the general ledger.
d. Trace the financial statement amounts to the trial balance.









Answer: A

Which of the following services provides limited assurance?

Which of the following services provides limited assurance?

a. Review.
b. Audit.
c. Examination.
d. Compilation.








Answer: A

Which of the following engagements requires less evidence than a review of financial statements?

Which of the following engagements requires less evidence than a review of financial statements?

a. A compilation.
b. An audit.
c. An examination.
d. Attestation.







Answer: A

A compilation report provides the user with which one of the following types of assurance?

A compilation report provides the user with which one of the following types of assurance?

a. No assurance.
b. Absolute assurance.
c. Limited assurance.
d. Negative assurance.





Answer: A

A review report provides the user with which one of the following types of assurance?

A review report provides the user with which one of the following types of assurance?

a. Reasonable assurance.
b. Basic assurance.
c. Absolute assurance.
d. Limited assurance.








Answer: D

Which of the following is an accounting service that involves performing inquiry and analytical procedures as a reasonable basis for expressing limited assurance that no material modifications need to be made to the financial statements in order for the financial statements to conform to GAAP?

Which of the following is an accounting service that involves performing inquiry and analytical procedures as a reasonable basis for expressing limited assurance that no material modifications need to be made to the financial statements in order for the financial statements to conform to GAAP?

a. A compilation.
b. An audit.
c. A review.
d. An agreed upon procedure.









Answer: C

What does the review service provided by the CPA firm require?

What does the review service provided by the CPA firm require?

a. It requires the CPA to make inquiries concerning matters affecting the financial statements.
b. It requires the CPA to confirm accounts receivable.
c. It requires the CPA to test internal controls.
d. It requires the CPA to provide reasonable assurance.




Answer: A

When the CPA is not independent with respect to a compilation client, what should the CPA do?

When the CPA is not independent with respect to a compilation client, what should the CPA do?

a. The CPA must not accept the engagement.
b. The CPA must include a separate paragraph in the report stating the lack of independence.
c. The CPA must change the engagement to a review engagement.
d. The CPA must issue a disclaimer.









Answer: B

When an accountant is asked to compile financial statements that omit substantially all of the required disclosures, which of the following actions is appropriate?

When an accountant is asked to compile financial statements that omit substantially all of the required disclosures, which of the following actions is appropriate?

a. The CPA cannot accept the engagement.
b. The CPA may accept the engagement.
c. The CPA may accept the engagement if the CPA believes the omission is not undertaken to mislead users.
d. The CPA must express an adverse opinion.








Answer: C

What types of companies can have a compilation performed in accordance with the AICPA standards?

What types of companies can have a compilation performed in accordance with the AICPA standards?

a. Public Companies: Yes; Nonpublic Companies: Yes
b. Public Companies: No; Nonpublic Companies: No
c. Public Companies: No; Nonpublic Companies: Yes
d. Public Companies: Yes; Nonpublic Companies: No



Answer: C

Which of the following standards represents the standards followed by CPAs providing a review of a client's financial statements?

Which of the following standards represents the standards followed by CPAs providing a review of a client's financial statements?

a. Statements on Standards for Accounting and Review Services.
b. Statements on Auditing Standards.
c. Statements on Standards for Consulting and Review Services.
d. Statements on Accounting Principles.








Answer: A

Which one of the following statements is false regarding a review?

Which one of the following statements is false regarding a review?

a. A review involves assessing fraud risk.
b. A review does not involve obtaining an understanding of the entity's internal control.
c. A review does not involve testing accounting records by obtaining sufficient appropriate evidence through inspection, observation, confirmation, or examining source documents.
d. A review does not involve a practitioner obtaining assurance that he or she will become aware of all significant matters that would be investigated in an audit.

Answer: A

Which of the following is not an AICPA general standard for attestation engagements?

Which of the following is not an AICPA general standard for attestation engagements?

a. The practitioner must have adequate technical training and proficiency to perform the attestation engagement.
b. The practitioner must have reason to believe that the subject matter is capable of evaluation against criteria that are suitable and available to users.
c. The practitioner must adequately plan the work and must properly supervise any assistants.
d. The practitioner must exercise due professional care in the planning and performance of the engagement and the preparation of the report.

Answer: B

Which of the following is not an AICPA standard of reporting for attestation engagements?

Which of the following is not an AICPA standard of reporting for attestation engagements?

a. The practitioner must identify the subject matter or the assertion being reported on and state the character of the engagement in the report.
b. The practitioner must state the practitioner's conclusion about the subject matter or the assertion in relation to the criteria against which the subject matter was evaluated in the report.
c. The practitioner must obtain sufficient evidence to provide a reasonable basis for the conclusions that is expressed in the report.
d. The practitioner must state all of the practitioner's significant reservations about the engagement, the subject matter, and if applicable, the assertion related thereto in the report.










Answer: D

What are the two topics that attestation standards provide guidance on?

What are the two topics that attestation standards provide guidance on?

a. They provide a plan for the engagement and criteria about who can participate in the engagement.
b. They provide guidance about gathering evidence regarding specific assertions and communicate an opinion on the fairness of the presentation to a third party.
c. They provide sufficient assurance on subject matter and appropriate assurance about reporting.
d. They provide guidance on reviewing evidence and compiling evidence.





Answer: B

What are the two levels of assurance that can be provided in an attestation engagement?

What are the two levels of assurance that can be provided in an attestation engagement?

a. Risk assurance and reduction assurance.
b. Professional assurance and compliance assurance.
c. Sufficient assurance and appropriate assurance.
d. Reasonable assurance and limited assurance.








Answer: D

Which of the following is not a critical component of attestation services?

Which of the following is not a critical component of attestation services?

a. Information or process (the subject matter) on which the assurance service is provided.
b. Criteria for evaluation, such as compliance with regulations.
c. Sufficient appropriate evidence.
d. Two parties involved, the practitioner (or the CPA) and the intended users of the report.









Answer: D

Which of the following is not subject matter that would be attested to in a non-audit attestation engagement?

Which of the following is not subject matter that would be attested to in a non-audit attestation engagement?

a. Historical events such as the price of a market basket of goods on a certain date.
b. Corporate governance, compliance with law and regulations, or human resource practices.
c. Management's assertions about historical financial information and associated disclosures.
d. Prospective financial information, performance measurements, or backlog data.








Answer: C

Which of the following statements is false regarding materiality judgments?

Which of the following statements is false regarding materiality judgments?

a. Materiality judgments are a matter of professional judgment.
b. Materiality judgments depend on the needs of a reasonable person (an investor, potential investor, or other stakeholder) relying on the information.
c. Materiality judgments involve both quantitative and qualitative considerations.
d. Materiality judgments are easy for auditors to make.








Answer: D