Examinations & Review Engagements

Question 1

Attest services

Answer 1

Audits (SAS)
Review (SSARS)
Agreed-upon procedures
Examination (SSAEs)

Question 2

Non-attest services

Answer 2

Consulting (SSCSs)
Tax (SSTSs)
Valuation (SSVSs)

Question 3

forecasts

Answer 3

expected financial position based on the conditions management anticipates will exist and the course of: general or limited use

Question 4

projections

Answer 4

“what if” scenarios evaluating hypothetical assumptions and courses of action
based on hypotheticals: report needs to include paragraph restricting use to specified parties: limited use only

Question 5

four general assertions of a management discussion and analysis (MD&A)

Answer 5

1. occurence: disclosed information took place during period
2. consistency with F/S: financial and nonfinancial information is aligned with F/S
3. completeness: all information needed has been disclosed/included
4. presentation and disclosure: information is clearly presented and understandable

Question 6

review of F/S includes statements:

Answer 6

1. that all information included in the F/S are the representations of management
2. describing the principal procedures performed (inquires of personnel and analytical procedures applied to financial data
3. describing the auditor’s conclusions based upon the results of the review

Question 7

______ requires management’s discussion and analysis for all public companies

Answer 7

SEC

Question 8

independence is

Answer 8

impartiality in both fact and appearance and is required for all attest services:
audit
reviews
examinations
agreed-upon procedures

Question 9

objectivity is

Answer 9

impartiality in fact and is required for all work done by CPAs

Question 10

in an review engagement, CPA

Answer 10

expresses conclusion on whether entity’s F/S are in accordance with applicable financial reporting framework

Question 11

issue unmodified report including:

Answer 11

intro paragraph
management’s responsibilities
accountant’s responsibilities
accountant’s conclusion

Question 12

intro paragraph says a review is

Answer 12

less in scope than an audit

Question 13

management’s responsibilities section of a review says

Answer 13

responsible for preparation and fair presentation of the F/S

Question 14

accountant’s conclusion section of a review says

Answer 14

“we believe that the results of our procedures provides a reasonable basis for our conclusion”

“we are not aware of any material modifications that should be made to the accompanying F/S in order for them to be in accordance with…”

Question 15

reviews may cover a single F/S provided

Answer 15

there are no restrictions limiting the scope of the accountant’s inquiry and analytical procedures

Question 15

review report date should be

Answer 15

no earlier than the date the accountant obtained evidence needed to reach a conclusion

Question 16

review procedures

Answer 16

obtain knowledge of client industry
obtain knowledge of client, their business and their acocunting policies and practices
make inquires of management
design and perform analytical procedures
obtain written representation from management in the form of a representation letter

Question 17

if reporting framework requires management to assess the entity’s ability to continue as a going concern; CPAs should make these 4 inquiries to determine:

Answer 17

1. whether the going concern basis of acounting is appropriate
2. if management’s assessment indicates substaintial doubt
3. what plans exist to mitigate substaintial doubt (if any)
4. whether related disclosures are adequate

Question 18

reviews do not

Answer 18

send letter of inquiry to client’s lawyer

Question 19

reviews are required to inquire with management about the entity’s ability to continue as a going concern under 2 conditions:

Answer 19

1. reporting framework (GAAP) requires that management evaluate the entity’s ability to continue as a going concern
2. reporting framework does not require management evaluate the entity’s ability to continue as a going concern but events or conditions indicate possible doubt