A5 NEW Flashcards
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.
ADVERSE
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.
CONCURRENT
2 CFR single audit allows auditors to use a _______________ approach to determine major grants.
RISK-BASED
___________ assurance may be expressed when an accountant is requested to report on the results of performing a review of management’s assertion.
NEGATIVE
When performing an integrated audit, are auditors responsible for obtaining sufficient evidence to support an opinion about the effectiveness of each individual control?
NO
A SOC 1® Type 1 report should include _______________ description of the service organization’s system.
MANAGEMENT’S
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?
NO
____________ 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.
NEGATIVE; OPINION
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.
INTERPRETATION; DIFFERENT
A CPA should refer to Statements on Standards for ________ __________ (SSAE) for a review of pro forma financial information.
ATTESTATION ENGAGEMENTS
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.
RELEVANT; ACTIVITIES; SERVICE
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.
FINANCIAL; AUDITED
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).
PUBLIC; ACCOUNTING; AICPA
A report on internal control over compliance will include a _______________ of ______________ on internal control over compliance.
DISCLAIMER; OPINION
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?
NO
What services are included under SSARS?
PREPARATION; COMPILATION; REVIEW
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.
INFORMATION
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.”
ASSUMPTION; PREPARATION; PRESENTATION
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.
DISCLAIMER; OPINION
An examination report on prospective financial statements states that the prospective results ________ _________ be achieved.
MIGHT NOT
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.
EXAMINATION; REVIEW; AGREED-UPON
A financial forecast is appropriate for ___________ use, but a financial projection is _____.
GENERAL; NOT
An accountant’s compilation report on a financial forecast should include a statement that there will usually be _____________ between forecasted and actual results.
DIFFERENCES
Whenever an accountant reports on ______________ financial statements, the report should include a ________ that prospective results may not be achieved.
PROSPECTIVE; CAVEAT
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.
SIGNIFICANT; MATERIAL; AUDIT
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.
RELEVANT; ILLEGAL; FRAUD
Government Audit Standards define three types of engagements: ___________ audits, ________ engagements, and _________________ audits.
FINANCIAL; ATTEST; PERFORMANCE
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.
RISKS
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.
REASONABLE; MATERIAL
A CPA should refer to Statements on __________ for ___________ Engagements for a review of pro forma financial information.
STANDARDS; ATTESTATION
______ forma financial statements are a set of financial _________ that use hypothetical data to predict a company’s future performance.
PRO; PROJECTIONS
Any type of ___________ financial statements (financial forecasts and financial projections) would normally be appropriate for __________ use.
PROSPECTIVE; LIMITED
The report on pro forma financial statements is not required to contain a ____________ use paragraph.
RESTRICTED
Prospective financial statements considered a ___________ projection would require a paragraph restricting the _____ and ___________ of the report.
FINANCIAL; USE; DISTRIBUTION
In an integrated audit, design effectiveness can be tested through ________, observation, and _________ of documentation.
INQUIRY; INSPECTION
Agreed-upon procedure engagements provide ____ assurance.
NO
Reviews provide ________ (________) assurance.
LIMITED; NEGATIVE
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.
STATEMENTS; ATTESTATION; MANAGEMENT’S
A statement referring to standards established by the AICPA should be included in a practitioner’s report on the application of ____________________ procedures.
AGREED-UPON
The ___________ on ___________ Standards (SASs) is the appropriate authoritative literature for both an audit of internal control and a financial statement audit of a nonissuer.
STATEMENTS; AUDITING
