Other Professional Services

Question 1

Which of the following is not included in a standard unqualified opinion on internal control over financial reporting performed under PCAOB requirements?

Answer 1

The [company name] management and audit committee is responsible for maintaining effective internal control over financial reporting.
Audit committee needs to be removed

Question 2

Which of the following need NOT be included in management’s report on internal control under Section 404a of the Sarbanes-Oxley Act of 2002?

Answer 2

While the report must indicate that it is management’s responsibility to establish and maintain adequate internal control, it need not also indicate that such control has no significant deficiencies.

Question 3

required on all attestation engagements?

Answer 3

attestation engagement will always have subject matter (suitable criteria), it sometimes will not have a written assertion.

Question 4

What type of opinion(s) are appropriate when circumstances result in a scope limitation in relation to an audit of a public company’s internal control?

Answer 4

withdraw from the engagement or disclaim an opinion

Question 5

Which of the following procedures is most likely to be an appropriate procedure when performed as an agreed-upon procedures engagement under the attestation standards?

Answer 5

Performance of mathematical computations.

Question 6

When third-party use of prospective financial statements is expected, an accountant may not accept an engagement to

Answer 6

Perform a review.

Question 7

According to PCAOB auditing standards, in reporting whether a previously reported material weakness continues to exist, the auditor may appropriately issue

Answer 7

disclaim an opinion or to withdraw from the engagement (or unqualified opinion)

Question 8

not a principle included in Trust Services engagements?

Answer 8

Independence

Availability, Confidentiality and Security are included

Question 9

Which of the following is not an objective of a CPA’s examination of a client’s management discussion and analysis (MD&A) prepared pursuant to Securities and Exchange Commission rules and regulations?

Answer 9

The presentation is in conformity with rules and regulations adopted by the Securities and Exchange Commission.

Question 10

In an integrated audit, which must the auditor communicate in writing to management?

Answer 10

Material weaknesses, significant deficiencies and other control deficiencies.

Question 11

An auditor identified a material weakness in December. The client was informed and corrected it shortly after the “as of date” (December 31); the auditor agrees that the correction eliminates the material weakness as of January 31. The appropriate report under a PCAOB Standard 5 audit of internal control is

Answer 11

PCAOB Standard 5 requires an ADVERSE audit report when a material weakness exists at year-end, the “as of date.”

Question 12

not an example of a company-level control?

Answer 12

Segregation of duties-control activity over specific type of transaction.
(company-level controls: Management’s risk assessment process; Controls over the drafting of financial statements; Controls to monitor the results of operations.)

Question 13

Trust Services Principle criteria

Answer 13

policies
communications
procedures
monitoring

Question 14

Which is correct when applying a top-down approach to identify controls to test in an integrated audit?

Answer 14

For certain assertions, strong entity-level controls may allow the auditor to omit additional testing beyond those controls.

Question 15

The profession’s ethical standards would most likely be considered to have been violated when a CPA

Answer 15

Issued a report on a financial forecast that omitted a caution regarding achievability.

Question 16

Which is not included in a compilation report on prospective financial statements, specifically a financial forecast?

Answer 16

Distribution of the report is restricted to specified parties.

Question 17

The auditor’s report on internal control over financial reporting in an integrated audit includes a statement that

Answer 17

the designing, implementing, and maintaining internal control over financial reporting is the responsibility of management.
(Description of the material weaknesses that may permit errors or fraud to occur and not be detected and corrected.–included when adverse opinion for material weakness)

Question 18

example of controls applicable to individual elements:

Answer 18

Controls over the completeness of deposited cash

Question 19

According to PCAOB auditing standards, the auditor is required to communicate, in writing, all identified material weaknesses to

Answer 19

Management and the audit committee.

Question 20

The auditors examined the client’s internal controls over cash receipts and concluded that they are operating exactly as designed. However, the design of the controls does not include control procedures to prevent misstatements and the potential omission of cash receipts.

Answer 20

Determine if the control deficiency is a material weakness by obtaining further evidence

Question 21

The auditor’s prior-year report on internal control included an adverse opinion. The client has since modified internal controls. No material weaknesses were found in the current year.

Answer 21

Express an unqualified opinion on the internal controls

Question 22

The client did not furnish adequate evidence for the auditor to evaluate the internal controls over inventory. All other evidence was provided.

Answer 22

Issue a disclaimer of opinion

Question 23

WHEN the final set of audit documentation is required to be assembled.

Answer 23

Documentation completion DATE

Question 24

A set of materials that identifies all significant findings or issues so that a reviewer can obtain a thorough understanding of such matters

Answer 24

Engagement completion document