A6- Accounting & Review Service Engagements, Interim Reviews, And Ethics

Question 1

What 3 services can a CPA provide to unaudited FS of a nonissuer

Answer 1

1. Preparation
2. Compilation
3. Review

Question 2

SSARS

Answer 2

Statement on standards for accounting & review

Question 3

An engagement to prepare Financial statements is a XXXXXX service & does not require a determination about independence

Answer 3

Non attest

Question 4

A compilation provides what level of assurance

Answer 4

NONE

Question 5

In a compilation, can you issue an opinion

Answer 5

NO

Question 6

Biggest difference between preparation & compilation

Answer 6

Compilations require a report preparations do not
Compilations require independence and preparations do not

Question 7

A review engagement provides how much assurance

Answer 7

LIMITED ASSURANCE

Question 8

Performance requirements for a review (U LIAR CPA)

Answer 8

Understanding
Learn
Inquiries
Analytical procedures
Review
Client rep letter
Professional judgement
Accountant (CPA)

Question 9

When predecessor accountants are asked to reissue their prior report, they should do what first

Answer 9

Read the new financial statements and obtain a representation letter from the new accountant

Question 10

Interim financial information may cover which period

Answer 10

1- a period less than a full year
2- a 12 month period ending on a date other than entity’s fiscal year end

Question 11

Each page of the interim financial information should be marked with what

Answer 11

“ UNAUDITED “

Question 12

PCAOB is composed of how many members and breakout of CPA vs non CPA

Answer 12

5 members- 2 CPAS 3 non CPAS

Question 13

PCAOB conducts annual inspections of registered public accounting firms that regularly provide audit reports to how many issuers

Answer 13

Over 100 issuers

Question 14

If audit firm has less than 100 issuers how often will PCAOB inspect

Answer 14

Every 3 years

Question 15

First step to take if there is a material departure from GAAP the auditor becomes aware of

Answer 15

Recommend to management to change it

Question 16

Discreditable acts according to AICPA professional code of conduct

Answer 16

1- failure to Return client records on request
2- negligence in preparing client records
3- failure to file a personal tax return on a timely basis

Question 17

Which type of report does independence not matter

Answer 17

Compilation but disclose why