A5 NEW

Question 1

A CPA is engaged to examine an entity’s financial forecast. The CPA believes that several significant assumptions do not provide a reasonable basis for the forecast. Under these circumstances, the CPA should issue an ___________ opinion.

Answer 1

ADVERSE

Question 2

An auditor was engaged to conduct a performance audit of a governmental entity in accordance with Government Auditing Standards. These standards do not require, as part of this auditor’s report, a ___________ opinion on the financial statements taken as a whole.

Answer 2

CONCURRENT

Question 3

2 CFR single audit allows auditors to use a _______________ approach to determine major grants.

Answer 3

RISK-BASED

Question 4

___________ assurance may be expressed when an accountant is requested to report on the results of performing a review of management’s assertion.

Answer 4

NEGATIVE

Question 5

When performing an integrated audit, are auditors responsible for obtaining sufficient evidence to support an opinion about the effectiveness of each individual control?

Answer 5

NO

Question 6

A SOC 1® Type 1 report should include _______________ description of the service organization’s system.

Answer 6

MANAGEMENT’S

Question 7

In an attest engagement, is the use of the accountant’s report restricted when reporting on an assertion about the subject matter instead of reporting directly on the subject matter?

Answer 7

NO

Question 8

____________ assurance, not an ________, may be rendered in an engagement in which the auditor is reporting on compliance with aspects of contractual agreement in connection with audited financial statements.

Answer 8

NEGATIVE; OPINION

Question 9

Management’s written representation to the auditor in connection with a governmental audit will include the identification of management’s _____________ of compliance requirements that are subject to ___________ interpretations.

Answer 9

INTERPRETATION; DIFFERENT

Question 10

A CPA should refer to Statements on Standards for ________ __________ (SSAE) for a review of pro forma financial information.

Answer 10

ATTESTATION ENGAGEMENTS

Question 11

When a service organization is part of an entity’s internal control, an auditor should test the entity’s _________ controls over the _________ of the _________ organization to obtain evidence that controls are operating effectively.

Answer 11

RELEVANT; ACTIVITIES; SERVICE

Question 12

The accountant’s report on a review of pro forma financial information should include a reference to the __________ statements from which the historical information is derived and a statement as to whether such financial statements were _________ or reviewed.

Answer 12

FINANCIAL; AUDITED

Question 13

A report on an issuer’s integrated audit must include the statement that the audit was conducted in accordance of the standards of the _________ Company ___________ Oversight Board (not ______ standards).

Answer 13

PUBLIC; ACCOUNTING; AICPA

Question 14

A report on internal control over compliance will include a _______________ of ______________ on internal control over compliance.

Answer 14

DISCLAIMER; OPINION

Question 15

Does an accountant’s standard report on a compilation of a projection include a statement that the hypothetical assumptions used in the projection are reasonable in the circumstances?

Answer 15

NO

Question 16

What services are included under SSARS?

Answer 16

PREPARATION; COMPILATION; REVIEW

Question 17

When a service organization provides services that affect the initiation, execution, processing, or reporting of a user company’s transactions, those services are considered to be part of the user company’s ____________ system.

Answer 17

INFORMATION

Question 18

When a CPA examines projected financial statements, the standard report should include a statement that the examination “…included such procedures as we considered necessary to evaluate both the ___________ used by management and the __________ and ___________of the projection.”

Answer 18

ASSUMPTION; PREPARATION; PRESENTATION

Question 19

A practitioner’s report on agreed-upon procedures that is in the form of procedures and findings should contain a _________ of ___________ on the subject matter.

Answer 19

DISCLAIMER; OPINION

Question 20

An examination report on prospective financial statements states that the prospective results ________ _________ be achieved.

Answer 20

MIGHT NOT

Question 21

Attest engagements generally result in an ______________ report, a ___________ report, or an __________________ procedures report on subject matter that is the responsibility of a party other than the practitioner.

Answer 21

EXAMINATION; REVIEW; AGREED-UPON

Question 22

A financial forecast is appropriate for ___________ use, but a financial projection is _____.

Answer 22

GENERAL; NOT

Question 23

An accountant’s compilation report on a financial forecast should include a statement that there will usually be _____________ between forecasted and actual results.

Answer 23

DIFFERENCES

Question 24

Whenever an accountant reports on ______________ financial statements, the report should include a ________ that prospective results may not be achieved.

Answer 24

PROSPECTIVE; CAVEAT

Question 25

In an audit of an issuer, the auditor is required to communicate both ____________ deficiencies and ___________ weaknesses to management and the ________ committee, but only material weaknesses result in an adverse opinion on the effectiveness of internal control.

Answer 25

SIGNIFICANT; MATERIAL; AUDIT

Question 26

Under Government Auditing Standards (GAGAS), when reporting on compliance with laws and regulations in a financial statement audit, the auditor’s report should include ___________ information regarding material __________ acts and _________ or irregularities found in the course of the audit.

Answer 26

RELEVANT; ILLEGAL; FRAUD

Question 27

Government Audit Standards define three types of engagements: ___________ audits, ________ engagements, and _________________ audits.

Answer 27

FINANCIAL; ATTEST; PERFORMANCE

Question 28

An auditor that is testing controls at a company with multiple business units should test controls over specific __________ at business units that are material to the company’s consolidated financial statements.

Answer 28

RISKS

Question 29

Basic elements of a report on compliance include a statement that the audit should be planned to obtain ___________ assurance about whether noncompliance could have a __________ effect on the programs audited.

Answer 29

REASONABLE; MATERIAL

Question 30

A CPA should refer to Statements on __________ for ___________ Engagements for a review of pro forma financial information.

Answer 30

STANDARDS; ATTESTATION

Question 31

______ forma financial statements are a set of financial _________ that use hypothetical data to predict a company’s future performance.

Answer 31

PRO; PROJECTIONS

Question 32

Any type of ___________ financial statements (financial forecasts and financial projections) would normally be appropriate for __________ use.

Answer 32

PROSPECTIVE; LIMITED

Question 33

The report on pro forma financial statements is not required to contain a ____________ use paragraph.

Answer 33

RESTRICTED

Question 34

Prospective financial statements considered a ___________ projection would require a paragraph restricting the _____ and ___________ of the report.

Answer 34

FINANCIAL; USE; DISTRIBUTION

Question 35

In an integrated audit, design effectiveness can be tested through ________, observation, and _________ of documentation.

Answer 35

INQUIRY; INSPECTION

Question 36

Agreed-upon procedure engagements provide ____ assurance.

Answer 36

NO

Question 37

Reviews provide ________ (________) assurance.

Answer 37

LIMITED; NEGATIVE

Question 38

A CPA is required to comply with the provisions of ____________ on Standards for ___________ Engagements (SSAE) when engaged to review ____________ discussion and analysis (MD&A) prepared pursuant to rules and regulations adopted by the SEC.

Answer 38

STATEMENTS; ATTESTATION; MANAGEMENT’S

Question 39

A statement referring to standards established by the AICPA should be included in a practitioner’s report on the application of ____________________ procedures.

Answer 39

AGREED-UPON

Question 40

The ___________ on ___________ Standards (SASs) is the appropriate authoritative literature for both an audit of internal control and a financial statement audit of a nonissuer.

Answer 40

STATEMENTS; AUDITING