M3-Attestation Engagements and Standards

Question 1

Attest engagements covered under Statements on Standards for Attestation Engagements (SSAE) specifically exclude services performed in accordance with Statements on Standards for Accounting and Review Services (SSARS). Since a review of a nonpublic company’s financial statements is conducted under SSARS, it is not subject to attestation standards. (true or false)

Answer 1

true

Question 2

Statements on Standards for Attestation Engagements do not address services involving advocating for a client, such as testifying as an expert witness. In addition, compilations of prospective financial statements are governed by Statements on Standards for Accounting and Review Services (SSARS). (true or false)

Answer 2

true

Question 3

Attestation standards provide a framework for the attest function beyond historical financial statements. (true or false)

Answer 3

true

Question 4

An engagement to report on management’s discussion and analysis (MD&A) would be considered an attest engagement, because the accountant is issuing an examination or review report on another party’s assertion. (true or false)

Answer 4

true

Question 5

Negative assurance may be expressed when an accountant is requested to report on the results of performing a review of management’s assertion. (true or false)

Answer 5

true

Question 6

A practitioner that does not have knowledge of the client’s business and industry should obtain the appropriate knowledge before commencing the engagement. For example, this knowledge may be obtained by reviewing industry trade journals. (true or false)

Answer 6

true

Question 7

A CPA should refer to Statements on Standards for Attestation Engagements (SSAE) for a review of pro forma financial information. (true or false)

Answer 7

true

Question 8

A CPA should refer to Statements on Standards for Accounting and Review Services (SSARS) when performing a preparation, compilation or review of historical financial statements for nonissuers. SSARS also applies to preparation and compilations of pro forma financial information. (true or false)

Answer 8

true

Question 9

Attestation engagements specifically exclude consulting services, advocacy services, and return preparation. (true or false)

Answer 9

true

Question 10

There is no requirement that the accountant’s report be restricted to specified parties when reporting on an assertion about the subject matter instead of reporting directly on the subject matter. (true or false)

Answer 10

true