Chapter 2 LO5

Question 1

The accounting and review services commitee of the AICPA issues pronouncement of the CPAs responsibilities whena CPA is associated with financial statements of privately owned companies that are not audited. what are they called ?

Answer 1

Statements on Standards for Accounting and Review Services (SSARS)

Question 2

in both preparation and compilation service, the accountant does what?

Answer 2

help the client prepare financial statements without providing any assurance.

Question 3

what 3 others things does the AICPA do?

Answer 3

1. The AICPA writes and grades the CPA Exam. 2. The AICPA supports its own research staff and provides grants to others for research. 3, The AICPA publishes the Journal of Accountancy, industry audit guides, and periodic updates to the Codification of Statements on Auditing Standards and the Code of Professional Conduct 4. provides alot of seminars and educational aids in vbariety of subjects . like online continuing education opportunities and reference materials

Question 4

Statements on Standards for Accounting and Review Services (SSARS) provide guidance for what?

Answer 4

preparation, compilation, and review services

Question 5

what is the AICPA?

Answer 5

American Institute of Certified Public Accountants …. the professional organization of CPAs

Question 6

is membership in the AICPA voluntary?

Answer 6

yes

Question 7

what does a n CPA do in a review service?

Answer 7

perfroms inquiry and analytical procedures that pro0vide a reasonable basis for expressing limited assurance on financial statement

Question 8

the statement on standards for attestation engagements by the AICPa do what (2)

Answer 8

1. they are standards that may be used to provide assurance on nonfinancial information 2. they are used to develop standards for specific attestation services

Question 9

T/F CPAs are licensed by the state in which they practice, but significant influence is exerted by their professional organization, the American Institute of Certified Public Accountants (AICPA

Answer 9

T

Question 10

what happens with regards to reports when a CPA performs a compilation serivice? a preparation service?

Answer 10

compilation- cpa issues a compilation report preparation- no report but the face of the fiancial statements must include a statement that “no assurance is provided”

Question 11

T/F the AICPA is not the largest professional association for CPAs in the US

Answer 11

F

Question 12

The accounting and review services commitee of the AICPA is responsible for what?

Answer 12

issuing pronouncement of the CPAs responsibilities whena CPA is associated with financial statements of privately owned companies that are not audited

Question 13

Membership in AICPA is restricted to ?

Answer 13

CPAs

Question 14

The AICPA sets standards and rules that all members and other practicing CPAs must follow in four major areas?

Answer 14

1.Auditing standards 2. Compilation and review standards 3. Other attestation standards 4. Code of Professional Conduct

Question 15

who sets the rules of conduct that CPAs are require to meet ?

Answer 15

the AICPA Professional Ethics Executive committee

Question 16

The Auditing Standards Board (ASB) of the AICPA issues auditing standards, called Statements on Auditing Standards (SASs), which apply to what?

Answer 16

all audit engagements not covered by PCAOB standards (PCAOB does publicly traded companies and broker dealers registered with the SEC