A6 Flashcards
1
Q
SSARS requires complied FS to be accompanied by:
A
compilation report
2
Q
an accountant is required to comply with the provisions of statements on standards for accounting and review services when engaged to:
A
prepare, compile, or review FS
3
Q
SSARS explicitly states that SSARS doesn’t apply when:
A
- an accountant prepares personal FS for inclusion in written personal financial plans
- solely for submission to taxing authorities
- in conjunction with litigation services that involve pending or potential legal or regulatory proceedings
- in conjunction with business valuation services
4
Q
knowledge of the accounting principles and practices of the industry is required to perform a compilation or review engagement. however, the auditor can:
A
obtain the required knowledge after accepting the engagement
5
Q
___________ is the authoritative body designated to promulgate standards concerning an accountant’s association with unaudited FS of a nonissuer
A
The accounting and review services committee
6
Q
_______ is responsible for auditing standards under GAAS
A
auditing standards board (ASB)
7
Q
_______ is responsible for standards under GAAP
A
Financial accounting standards board (FASB)
8
Q
SSARS applies to the preparation of FS that are presented “alongside” the entity’s tax return. SSARS would not apply if the preparation of the FS with the tax return were:
A
soley for submission to taxing authorities
9
Q
reviewing interim financial data required to be filed with the SEC is covered under:
A
PCAOB standards
10
Q
______ should be included in the documentation of a preparation of FS
A
engagement letter
11
Q
a preparation engagement doesnt require the practitioner to obtain:
A
management rep letter
12
Q
each page of FS in a preparation engagement should include a statement indicating:
A
that no assurance is provided
13
Q
_____ is considered a non-attest engagement
A
preparation engagement
14
Q
review, compilation, audit are considered:
A
attest engagements
15
Q
If an accountant is unable to include a statement indicating that “no assurance is provided” on each page of the FS, then the auditor should either:
A
- issue a disclaimer that makes clear that no assurance is provided on the FS or
- perform a compliation engagement
16
Q
in the preparation of FS, the accountant may:
A
- provide assistance to managment with significant judgements
- omit substantially all disclosures required by GAAP
17
Q
a preparation engagement involves the accountant preparing FS using:
A
the records, documents, explanations, and other info provided by managment
18
Q
an accountant is required to read the FS and consider whether such FS appear to be free from obvious material errors before:
A
issuing a compliation report under SSARS
19
Q
obtaining a management rep letter is required in a review and audit, but isnt required for:
A
a compliation
20
Q
when an accountant compliles a client’s FS accompanied by supplemental info, the accountant’s separate report on the supplemental information should include a statement that:
A
the info has been compiled from information that is the representation of management without audit or review
21
Q
when an accountant reviews a client’s FS accompanied by supplemental info, the accountant’s separate report on the supplemental info should include a statement that:
A
the accountant did not become aware of any material modifications that should be made to the information
22
Q
an accountants compliation report on the unaudited FS of a nonissuer should:
A
disclaim an opinion on FS
23
Q
a _____ report states that a _____ includes primarily appling analytical procedures to management’s financial data and making inquires of company managment
A
review
24
Q
as part of a _______, an accountant would ask about actions taken at board of directors’ meetings that affect the FS
A
review engagement
25
an accountant who is not independent in a compilation report should disclose this lack of independence in:
the last paragraph of the report.
26
the date on a compliation report should be the date of:
completion
27
_________ should include a statement that the accountant was not required to perfomr any procedures to verify the accuracy or completeness of the info provided by mangement
compliation report
28
the accountant may compile FS that omit substantially all disclosures provided that:
1. the accountant's report clearly indicates the omission by including an addittional paragraph disclosing such ommissions. this paragraph should state that if the disclosures were included, they might influence the user's conclusions, and should indicate that the FS are not designed for those who are uninformed about the ommitted disclosures
2. to the accountant's knowledge, the omission is not intended to mislead any person who might be expected to use such FS
29
a _________ implies that substantially all disclosures required by GAAP are included in the FS
standard compilation report
30
CPA is engaged to compile the FS of company, a nonissuer. company FS are prepared in comformity with cash basis of accounting. If company's FS do NOT disclose the basis of accounting used, what is CPA's reporting responsibility?
CPA should modify the compliation report to disclose the basis of accounting used in the compilation report (CPA cannot modify FS)
31
if an accountant performing a compliation for a nonissuer believes that the FS might be materially misstated and the client refuses to provide additional or revised info, then:
accountant should withdraw
32
the accountant should either disclose the effects of the material misstatement (if known) in a separate paragraph of the ______ or withdraw from the engagement.
compliation report
33
appropriate reasons for changing the engagement include:
a change in client requirements or a misunderstanding as to the nature of the service to be rendered
34
_____ report doesnt contain a title
compliation
35
Does SSARS require that the compilation report be printed on the accountant's letterhead?
report may be presented in the accountant's letterhead, but not required
36
Does SSARS require that the compilation report be manually signed by the accountant?
signature is required but not manual
37
if an accountant decides that a change in engagement is justified then,
the report should not make reference to the orignial engagement
38
a compliation of a specific element, accounts, or items of a FS means the accountant is:
compiling info for a certain aspect of the FS
39
an accountant should issue a compliation report even though review procedures were performed on the engagement because:
the accountant was engaged to perform a compliation engagement.
40
______ issued in accordance with SSARS should state that the CPA is not aware of any material modifications that should be made to the FS
standard review report
41
"CPA has no responsibility to update the CPA's report for events and circumstances occurring after the report's date" appears:
in reports on prospective FS under SSAE
42
"CPA believes that there will usually be differences between the projected and actual results" appears:
in reports on projected FS under SSAE
43
"assessed the accounting principles used and significant estimates made by mangement" appears:
an issuer standard audit report
44
FS reviewed by an accountant should be accompanied by a report stating that:
a review is substantially less in scope than an audit
45
_____ is often used to examine relationships between BS accounts
ratio analysis
46
_____ is used to examine income statement accounts
trend analysis
47
in a review, analytical procedures consist of:
- comparisions of the FS with statements for a comparable prior period
- comparisions of the FS with anticipated results (budgets and forecasts)
- a study of the relationships of the elements of the FS that would be expected to conform to a predictable pattern
48
the accountant ________ restrict the use of the review report
would not normally
49
when reviewing a nonissuer's FS, an accountant ordinarily makes inquires concerning:
the entity's procedures for recording and summarizing transactions
50
each page of the FS reviewed by the accountant should include a reference:
"See independent accountants review report"
51
when reviewing the FS of a nonpublic entity, _____ is expressed in the review report in accordance with SSARS
no opinion
52
in a review of a nonissuer's FS, an accountant (should/should not) inquire about the existence of related party transactions
should
53
in a review of a nonissuer's FS, the successor accountant __________ to communicate with the predecessor accountant
may decide but is not required
54
an interim review (where the annual financial statements are audited) falls under _______ requirements for a nonissuer and issuer, respectively, and would require an understanding of internal control
SAS or PCAOB
55
in a review of a nonissuer's FS, an accountant (should/should not) inquire about material subsequent events
should
56
if the supervising accountant becomes aware that info provided by management is incorrect, then the accountant should request that management is incorrect, then the account should:
request that management consider the effect of the related matters on the FS
57
modifications are made to the standard review report only when:
theres a departure from GAAP
58
if management will not capitalize the leases, the accountant should modify the report when:
- the modification is sufficient to disclose the departure from GAAP, if not then withdraw.
- this paragraph disclosing the departure from GAAP should appear after the accountant's conclusion paragraph under "known departures from accounting principles generally accepted in US"
59
the accountant may still provide limited assurance with respect to the entity's FS in the review report, as long as:
departures from GAAP are disclosed "based on my review, except for the issue noted in the known departures from accounting principles generally accepted in US, I am not aware of any material modifications"
60
If the review report on the current period includes a separate paragraph describing the responsibility assummed for the prior period's auditied FS, the additional paragraph should state:
no audit procedures were performed subsequent to the previous period's audit
61
before reissuing a compilation report on the FS of a nonissuer for the prior year, the predecessor accountant should obtain a letter from:
successor accountants
62
when the prior period has been audited, the accountant should issue the current period compilation or review report, and any additional paragraph should indicate:
- that prior period statements were audited
- the date of previous reports
- the opinons expressed and if other than unmodified, the reasons for the modification
- that no auditing procedures have been performed since the previous report date
63
Unaudited FS for the prior year presented in comparative form with audited FS for the current year should be clearly marked to indicate their status "unaudited", and either:
- the report on the prior period should be reissued or
- the report on the current period should include a separate explanatory paragraph describing the responsibility assumed for the prior period's FS
64
Prior years review of the FS and current years compilation of the FS are to be presented as comparative FS this year. What are the three reporting options?
1. issue a compliation report with an extra paragraph describing the responsibility assumed for the prior period statements and including a statement that no review procedures were performed after the date of the review report
2. issue two separate reports, a compilation report for the current year and a review report for the prior year
3. issue a combined report, including both full reports and a statement that no review procedures were performed after the date of the review report
65
In order for the FS to be considered in appropriate form when using another basis of accounting, the FS would need to include:
1. description of the other comprehensive basis of accounting (OCBOA), including a summary of significant accounting policies and descriptions of the primary differences from GAAP
2. disclosures similar to those required by GAAP if the FS contain items included in FS prepared in accordance with GAAP
66
an accountant asked to review FS on a comprehensive basis of accounting other than GAAP should modify the review report to:
reflect the fact that the financial statements were presented on another comprehensive basis of accounting
67
when unaudited FS are presented in comparative form with audited FS in documents filed with the SEC, such statements should be _______, but should not be _______
clearly marked as unaudited, referred to in auditor's report
68
an accountant should add _______ in the review report when the accountant considers it necessary to communicate a matter that is not presented or disclosed in the FS
other matter paragraph
69
an accountant should add _______ in the review report when the accountant considers it necessary to communicate a matter that is presented or disclosed in the FS
emphasis of matter paragraph
70
while performing review procedures, CPA becomes aware of a significant change in the control activities at one of Andrew's branch locations. what would the CPA consider in performing in response to this situation?
- making additional inquires, such as whether managment has monitored the changes and considered whether they were operating as intended
- employing analytical procedures with a more precise expecation
71
as part of planning a review under auditing standards of interim financial info, CPA reads the audit documentation from the preceding year's annual audit. What would affect the review?
- summary of both corrected and uncorrected misstatements
- significant weaknesses in internal control (helps identify the types of MM that may occur in interim financial info and to consider the likeihood of their occurence)
- identified risks of MM due to fraud (help identify the types of MM that may occur in interim financial info and to consider the likeihood of their occurence)
72
a review of the interim financial info of a publicly held company is conducted in accordance with:
PCAOB
73
the objective of a review of interim financial information is to:
provide the accountant, through inquires and analytical procedures, with a basis for reporting whether material modifications should be made to such info to conform with GAAP
74
If a report on a review of interim financial info is presented in a registration statement, the prospectus should include a statement that:
the report is not a "report" or "part" of the registration statement.
(the accountant should also read the other portions of the registeration statement to ensure that his or her name is not used in a way that indicates greater responsibility than she intends)
75
the accountants review of interim financial info is performed in accordance with PCAOB standards, as:
approved by SEC
76
in the accountants review of interim financial info, the auditor is responsible to update the report for events occurring after the date of the report but:
prior to filing
77
a review of ________ requires communication with the predecessor auditor while review of _______ doesn't
public entity's interim financial info, nonissuer's unaudited FS
78
a review of ________ requires an evaluation of internal control while a review of _______ doesn't
public entity's interim financial info, nonissuer's unaudited FS
79
the auditor's report on a review of interim financial info of a public company:
- is similar to a review report under SSARS in that both make reference to the performance of inquiry and analytical procedures
- provides negative assurance
- includes references to professional standards in the Basis for Review section. (none for review under SSARS)
80
What are the phases of a review of an audit client's interim FS?
1 Understand the client
2 learning and obtaining a sufficient understanding of the entity and its environment (including IC)
3 inquiries addressed to the appropriate individuals
4. analytical procedures
81
In a typical comfort letter, the accountants express an opinion (positive assurance) concerning:
the audited FS compliance with the pertinent accounting requirements of the SEC included in the registration statement
82
a typical comfort letter is addressed to:
the underwriters of securities
83
In a typical comfort letter, the accountants express negative assurance concerning:
-unaudited condensed financial info
84
In a typical comfort letter, the accountants express no assurance concerning:
the operation of an entity's internal control
85
a comfort letter is a letter containing a negative assurance from ______ to the underwriter or certain other requesting parties just before the registration of the client's securities
the CPA
86
a comfort letter generally covers the period from:
the date of the last auditor's report to the effective date of the registration
87
when an accountant issues to an underwriter a comfort letter containing comments on data that havent been audited, the underwriter will receive:
negative assurance on capsule info
88
comments in a comfort letter are limited to:
financial info
89
advertising that is ________ is allowed according to the advertising and other forms of solicitation rule
objective and informative
90
independence of a member is impaired if the CPA's spouse is employed by the client in a position which is audit sensitive. examples of those positions are:
cashier, internal auditor, accounting supervisor, purchasing agent, or inventory warehouse supervisor
91
the following loans don't impair independence:
1. automobile loans
2. loans of the surrender value under terms of an insurance policy
3. borrowings fully collateralized by cash deposits at the same financial institution
4. credit cards and cash advances on checking accounts with an aggregate unpaid balance of $10,000 or less
92
acting as an honorary trustee for a not-for-profit company:
doesnt impair independence
93
litigation not related to the engagement for an immaterial amount:
doesnt impair independence
94
according to the independence rule, independence requirements extend to:
the member's spouse, dependent children, and dependent relatives
95
according to the independence rule of the code of professional conduct, independence is impaired based on:
control or the appearance of control that a member can exert over the investment
96
why is an investment held through a nonclient regulated mutal fund NOT a direct financial interest?
the member doesnt control which stocks the mutual fund is investing in
97
why is an investment help through a nonclient investment club a direct finanical interest?
the member can exert control upon which investements are purchased by the investment club
98
why is an investment help through a nonclient investment club a direct finanical interest?
the member can exert control upon which investements are purchased by the
99
why is an investment held by the trustee of a trust a direct financial interest?
the member can exert control upon which investements are purchased by the trustees in trusts
100
why is an investment held in a blind trust a direct financial interest?
the member can exert control upon which investements are purchased by the trustees in trusts
101
According to the independence rule of the code of professional conduct, a member's independence is impaired with respect to a client who is more than:
one year overdue in the payment of professional fees
102
fees from prior work must be paid in full before:
the issuance of a report on the following years work
103
retaining a client's records after a demand for their return has been ruled is:
a discreditable act
104
contingent fees are prohibited when __________, but not when _________
preparing a tax return, representing a client in an examination by the IRS
105
exercise of due care dictates consultation or referral when:
a professional engagement exceeds the CPA's personal competence. (no requirement to obtain speciality accreditation
106
A CPA may ____ a product to a client
resell
107
due care in performing an audit requires a member to:
plan and supervise adequately any professional activity for which he or she is responsible
108
the attainment of the proper balance between professional experience and formal education is related to the:
training and proficiency requirement
109
a CPA must maintain ______ in the performance of any professional service
integrity and objectivity
110
_____ are fees based on a specific finding or result, and often prohibited for attest engagements, including audits
contingent fees
111
independence is impaired if an auditor is:
an employee of an audit client or is able to make management decisions on behalf of an audit client
112
being a promoter consitutes a business relationship that would:
impair independence
113
the advisor doesn't make decisions, the advisor simply gives advice that the client is free to:
accept or reject (doesnt impair independence of auditor)
114
fees are not regarded as being contingent when they are fixed by courts or other public authorities or in tax matters, if:
they are based on the results of court proceedings or the findings of governmentental agencies
115
contingent fees are permitted for compilations only if:
the member includes a statement that the member is not independent
116
membership in a trade organization that is a client would not cause independence to be impaired unless:
the CPA served in a managment capacity of the trade organization
117
A CPA auditor cannot work for the client in a key position during:
the audit year
118
if the results of the valuation and appraisal services are material to the clients FS, the auditor's:
independence is impaired
119
a financial instituation client loans the auditor money to buy a car but doesnt collateralize the loan. is independence impaired? why or why not?
yes, since the loan isnt collateralized. if it was, then independence wouldnt be impaired
120
according to the code, a close relative is defined as:
a parent, sibiling, or nondependent child
121
brother in law as a audit client's controller would:
not impair independence
122
a member's independence is impaired if a member has a loan with a client and that loan is preferential in relationship to other borrowers. since the loan was fully secured and there was no indication of a "preference", it appears to be:
in the ordinary course of business
123
if the CPA is no longer a debtor of the financial institution at the time of the audit engagement, then the CPA is:
considered independent
124
the fact that the CPA had a loan with the client during the period covered in the clients FS:
doesnt impair independence
125
purchasing a CPA firms practice based on a percentage of fees is:
a legitimate method of pricing the business
126
an ethics ruling related to the confidential client info rule states that it is permissible for a member to disclose the name of a client without the client's consent unless:
the disclosure of the name results in the release of confidential info
127
examples of activities with an attestation client that impair independence would include bookkeeping activities that include:
authorizing, executing or consummating a transaction on behalf of a client or preparing source documents or originating data
128
A CPA firm may disclose the client's name unless:
disclosure would suggest that the client may be experiencing financial difficulties
129
contingent fees are permitted when they involve:
a legal proceeding or ruling
130
the accounting principles rule of the code of professional conduct of the AICPA states that if the FS or data contains a GAAP departure, the departure may be justified if:
the CPA can demonstrate that due to unusual circumstances, such as new legislation or the evolution of a new form of business transaction, the FS would otherwise be misleading
131
if the auditor has a cash balance in a brokerage account that is fully covered by the securities investor protection corporation then:
independence is not impaired
132
contingenet fee arrangements ____ the auditor's independence
impair
133
a _________ is viewed as a direct financial interest
contingent fee
134
when a CPA solicits recent uniform CPA exam questions without written authorization from the AICPA it is considered:
discreditable act
135
a CPA that signs a document containing immaterial false and misleading info, or permits or directs another CPA to do so, has failed to follow:
integrity and objectivity rule
136
if a covered member learns that another member of an attest engagement team is considering employment with the client, then:
the member should notify an appropriate person in the firm
137
The member considering employement with the client needs to:
disassociate and no longer participate in the attest engagement
138
The AICPA code of professional conduct governs:
any service that a member of the AICPA performs, including reviews and compilations
139
the AICPA code of professional conduct includes:
principles provied an overall framework and rules govern performance
140
The AICPA code of professional conduct's general standards include:
professional competence, due professional care, planning and supervision, and sufficient relevant data
141
Using a CPA partnership name that includes the names of past owners is:
acceptable
142
a firm ____ continue to use a partnership name for more than two years after becoming a sole practitioner
may not
143
A CPA is under no ethical obligation to comply with subsequent requests to again provide records or copies of records unless:
the client experiences a loss of records due to natural disaster or an act of war
144
The public company accounting oversight board was established by:
Sarbanes-oxley act of 2002
145
Under the SEC's rules, the lead and concurring partner must rotate off the engagement after ______ years and other audit partners must rotate after _____ years.
5, 7
146
The IFAC code of ethics requires that the lead and engagement quality review partners on public company audits rotate after:
no more than 7 years
147
The lead and concurring partners are subject to a _____ year time out period before they can return to an engagement.
5
148
other audit partners are subject to a ____ year time out period
2
149
_______ may be exempted from the partner rotation rules
small firms with fewer than 5 clients who are issuers
150
non audit services that do not exceed 5 percent of total revenues from an audit client do not require audit committee preapproval as long as:
the services are brought to the audit committee's attention and approved before the completion of the audit
151
all audit, review, attestation, tax and significant non-audit services must be:
preapproved by the audit committee, even if provided on a recurring basis
152
permitted tax services an auditor can provide are:
tax compliance, tax planning, and tax advice
153
The PCAOB prohibits tax services related to:
confidential or aggressive tax transactions and tax services to corporate officers of audit clients or immediate family members of corporate officers
154
Registered public accounting firms are required to maintain audit work papers and supporting documentation for a period of _____ years
7
155
to impose a disincentive to fraud, an audit team member may not accept employment as CEO, CFO, CAO, or controller of an audit client that files reports with the SEC for:
one year
156
The sarbanes oxley act requires the PCAPB to perform an annual inspection of each registered public accounting firm that regularly provides audit reports for more than:
100 issuers
157
communication requirements an auditor must follow when providing tax services to an audit client who is an issuer under SOX:
-auditor must communicate to the audit committee, in writing regarding the proposed tax services and related fees, and must discuss with the audit committee the potiential effects of the proposed tax services on the firm's independence
158
requirements an auditor must follow when providing tax services to an audit client who is an issuer under SOX:
tax services related to contingent fee arrangements, confidential tax transactions, and certain aggressive tax transactions are expressly prohibited
159
to participate in the preparation of audit reports for a company registered with the SEC, a CPA firm must first register with:
PCAOB
160
Regulation S-X provides that all three conditions must be met for an auditor of an issuer to provide client non-audit services without impairing independence and without obtaining the preapproval of the audit committee:
- services that the issuer didnt recognize as nonaudit services at the time of the engagement
- nonaudit services with revenues in aggregate of less than 5 percent of the total revenues paid by the issuer to the auditor during the fiscal year in which the non audit services are provided
- nonaudit services that were promptly brought to the attention of and approved by the audit committee prior to the complettion of the audit
161
The independence of the registered public accounting firm would not be considered impaired if:
the former partner has no remaining capital balance in the registered public accounting firm
162
Under SEC rules, if a former partner will be in an accounting rule or financial reporting oversight role with an SEC audit client, she may not:
- have a captial balance with the firm
- influence over the accounting firms operations or financial policies
- financial arrangement with the accounting firm that is related to the firms current revenues, profits, or earnings
163
___________ requires each annual report of an issuer to include management's assessment fo the effectiveness of internal control over financial reporting
Section 404 of the SOX act of 2002
164
section 404 of the Sarbanes oxley act of 2002 requires each issuer's annual report to contain an internal control report that:
1. states the responsibility of managment for establishing and maintaining an adequate internal control structure and procedures for financial reporting
2. contains an assessment, as of the end of the most recent fiscal year of the issuer, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting
165
section 404 of the Sarbanes oxley act of 2002 requires the company's external auditors to:
attest to, and report on, the internal control assessment made by management of the issuer
166
improper influence occurs when an officer or director of an issuer fraudulently influences, coerces, manipulates, or misleads the independent auditor of the FS for the purpose of:
rendering the FS materially missleading
167
The PCAOB has the right to impose ____ monetary penalties
civil
168
The PCAOB must conduct an inspection once every three years for registered public accounting firms that issue:
100 or less audit reports
169
The PCAOB can impose any sanctions it approves, including:
financial penalties, suspension or revocation of PCAOB registration, and required CPE courses
170
the PCAOB consists of:
2 CPAs and 3 nonCPAs
171
the provision of services involving contingent fee arrangements impairs:
independence
172
experience on an audit committee or disclosure committee of a board of directors would:
not enable one to acquire the attributes of a financial expert
173
a person identified as an audit committee financial expert of an issuer generally must have acquired the attributes of a financial expert through:
involvement as a principal financial officer, principal accounting officer, controller, public accountant, auditor, or one who actively supervisers or assesses the performance of one of these financial jobs
174
The Department of Labor requires:
auditor independence when auditing and providing an opinion on the financial info submitted annually to the DOL
175
If the auditor's firm maintains financial records for the employee benefit plan then:
independence is impaired
176
a government internal audit function is presumed to be free from organizational independence impairments for reporting internally when:
the head of the organization is removed from political pressures to conduct audits objectively, without fear of political reprisal
177
_____ includes independence of mind and appearance when providing audits, maintaining and attitude of impartiality, having intellectual honesty, and being free of conflicts of interest
objectivity
178
_____ includes an auditor's honest effort in the performance of professional services in accordance with the relevant technical and professional standards
professional behavior
179
_____ includes auditors conducting their work with an attitude that is objective, fact-based, nonpartisan, and non-ideological with regard to the audited entities and users of the auditor's reports
integrity
180
____ is defined as the collective wellbeing of the community of people and entities served by the auditor
public interest
181
_____ is the threat that a financial or other interest will inappropriately influence an auditor's judgement or behavior
self interest threat
182
______ is the threat that an auditor will, as a result of political, ideological, social, or other convictions, take a position that is not objective
bias threat
183
_____ is the threat that an auditor or audit organization that has provided nonaudit services will not appropriately evaluate the results of previous judgements made or services performed as a part of the nonaudit services when forming a judgement significant to an audit
the self review threat
184
_______ is the threat that results from an auditor's taking on the role of management or otherwise performing managment functions on behalf of the entity undergoing an audit
management participation threat
185
Ethics as defined by GAGAS address the topics of:
serving the public interest, integrity, objectivity, proper use of government info, resources and positions, and professional behavior
186
______ is the threat that aspects of a relationship with managment or personnel of an audited entity, such as a close or long relationship, or that of an immediate or close family member, will lead an auditor to take a position that is not objective
familiarity threat
187
safeguards to threats to independence identified by GAGAS are generally not effective to mitigate:
management participation threat
188
the undue influence threat might be mitigated by:
having a professional staff member who was not a member of the audit team review the work performed
189
the self interest threat might be mitigated by:
removing the individual from an audit in which that individuals finanical or other interest or relationships pose a threat to independence
190
the self review threat might be mitigated by:
involving another audit organization to perform or reperform part of the audit
191
a critical component of the determination of whether providing a nonaudit service would create a threat to independence is:
consideration of management's ability to effectively oversee the nonaudit service to be performed
192
A client has asked CPA to provide a comfort letter. What level of assurance is needed for conformity with the disclosure requirements of regulation S-k
no assurance
193
A client has asked CPA to provide a comfort letter. What level of assurance is needed for the CPA's independence?
positive
194
the accounting principles rule of the code of professional conduct of the AICPA states that if the FS or data contains a GAAP departure, the departure may be justified if:
the CPA can demonstrate that due to unusual circumstances, such as new legislation or the evolution of a new form of business transaction, the FS would otherwise be misleading
195
a review of a nonpublic company's FS is conducted under:
SSARS
196
there should be no understanding of what in a review under SSARS?
internal control
197
Communication of inconsequential employees' noncompliance with laws and regulations is not required for:
any engagement. (consequentual is and should be reported to the board of directors, appropriate level of managment and the owner)
198
A revision of a material number(s) and/or disclosure in prior issued financial statements will result in the financial statements being ________. If there are no material number(s) updated and/or disclosure(s) that need to be updated, then the financial statements are reissued with ______.
restated, no changes
199
Generally, in a ______, the accountant merely inquires of management and does not need additional detailed evidence to substantiate management's responses.
review
200
This question may be asked in a review, Determining whether investments are encumbered typically relates to:
disclosures for investments.
201
If cash is used as a compensating balance or has restrictions on the availability of funds, then:
appropriate disclosure and presentation of the cash balance can be verified (in a review question about cash balance)
202
Typically, in a review, the accountant does not perform detailed substantive testing, such as recalculation procedures, on _______ account balances.
individual
203
Sometimes when a company obtains debt, the company has to provide collateral for the debt. This provides more security for the creditor loaning the money. Assets that have been pledged as collateral should be:
disclosed in the financial statements. (should ask in a review)
