MCQ aud 2.7

Question 1

In performing an attest engagement

Answer 1

Staments of standards of attestment engagements apply to engagements in which a practioner is engaged to issue or does issue an examnination a review or an agreed upon procedures on subject matter which is the responsibility of another party. CPA issue a report on subject matter that is the responsibility of another party

Question 2

accounting basis which are acceptable

Answer 2

Cash basis
Regulatory basis
contractual basis
Income tax basis

Question 3

standards of accounting and review services

Answer 3

the activities should constitute submission of financial statements

Question 4

Financial forecast and financial projection

Answer 4

Financial forecast is for general use. Financial projection is for particular users only. Not for everybody
A report on compiled projected financial statements does not express any assurance on achievability of results.

Question 5

An auditors special report on financial statements prepared in conformity of cash basis of accounting

Answer 5

should include an emphasis matter of paragraph that justifies any reason for any departure from GAAP

Question 6

Compilation VS review

Answer 6

A compilation states that the accountant does not express an opinion or any other form of assurance on the financial statements. A review provides limited assurance

Question 7

Review

Answer 7

NO form of opinion is based on a review. however, limited assurance is provided regarding the financial statements

Question 8

In a compilation report of a non issuer

Answer 8

the accountant should explicitly state the financial statements have not been audited and the accountant has compiled the financial statements

Question 9

prospective financial statements that present an entity expected financial position (given one or more hypothetical assumptions)

Answer 9

may subject to an 
1. Examination
2. Compilation
3. Agreed upon procedures
but not review

Question 10

Management advisory services ( known as consulting services)

Answer 10

Require the accountant to find conclusions and recommendations

Question 11

when the independent accountants report based on review of interim financial statements is presented in a registration statement

Answer 11

The prospectus should include a statement clarifying the accountants review is not part of the registration statement

Question 12

comfort letters

Answer 12

are often issued to underwriters of securities

Question 13

A practitioners report on agreed upon procedures

Answer 13

should issue a statement of restrictions on the use of report

Question 14

an engagement is to

Answer 14

examine entitys assertion that the entitys schedule of investment returns is presented in accordance with specific criteria is not a consulting service.

Question 15

SSARS compilation report

Answer 15

need not be printed on accountant letter head or does need to have manual signature

Question 16

Statements of standards on accounting and review services

Answer 16

preparing interim financial statements

Question 17

The objective of compilation is to

Answer 17

Present financial statements in the form of financial statements

Question 18

A special report refers to an audit report

Answer 18

on financial statements that are prepared in conformity with comprehensive basis of accounting rather than Generally accepted accounting principles specified elements accounts or item of a financial statement compliance with aspects of contractual agreements . Special reports not issued in review engagements