Beruflich Dokumente
Kultur Dokumente
False
False
False
4. CPA SysTrust provides assurance that a Web site meets certain criteria.
True
False
False
False
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False
False
False
False
False
False
False
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14 The user auditor can rely on special purpose reports on internal control
. of a service organization in connection with the evaluation of the client
organization.
True
False
False
A.
Information technology.
B. The shift from the industrial age to the knowledge age.
C.
Globalization.
D. Merging of corporations creating fewer audit opportunities.
17 Assurance services are defined as independent professional services
. that
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A.
B.
C.
D.
WebTrust.
SysTrust.
XBRL.
WebSecure.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
22 Extensible Business Reporting Language (XBRL) provides a computer. readable identifying tag for each individual item of data. The
advantages of XBRL include all of the following except that it
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A.
B.
C.
D.
A.
The report to include an opinion.
B. The report to identify the subject matter of the assertion being
reported on.
C. The report requires a statement that the presentation is not in
accordance with GAAP.
D. The report requires a disclosure of the procedures performed during
the attestation.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A.
The client's controller.
B.
The independent accountant.
C. The client's vice president of marketing.
D. A client employee named in a contract or regulation as being
responsible for the information.
31 Which of the following procedures would not be performed in a review
. of financial statements of a nonpublic company?
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A. Report on the year Y review and reissue the year X audit report.
B. Provide only the report concerning the year Y review.
C. Reissue the year X audit report with an explanatory paragraph
disclosing that only a review was performed on year Y.
D. Notify the client that prior-year audited financial statements cannot
be presented when the current-year statements have not been
audited.
33 In an agreed-upon procedures engagement, an accountant
.
A. Follows all of the fundamental principles of GAAS.
B. Restricts the report to specified users.
C. Includes negative assurance in the report.
D.
Gives a qualified audit report.
34 Which of the following procedures should an accountant perform during
. an engagement to review the financial statements of a nonpublic
entity?
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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A.
Assess planning materiality.
B.
Assess inherent risk.
C. Confirm restrictions with applicable third parties.
D.
Consider subsequent events.
48 An accountant's report includes the phrase "We are not aware." This
. phrase indicates that
A.
An attestation was not performed.
B. Management had not established sufficient criteria for an opinion to
be issued.
C. The auditor is providing negative assurance.
D.
A disclaimer of opinion is presented.
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A.
In all cases.
B. When it has not been labeled as "unaudited."
C. When it is material to the financial statement users.
D. When the information has been reviewed rather than audited.
54 Other comprehensive basis of accounting (OCBOA) includes all of the
. following except
A.
Balance Sheet.
B. Statement of Assets, Liabilities, and Owner's Equity.
C.
Statement of Revenue and Expenses.
D. Statement of Change in Partners' Capital Accounts.
56 When a company uses a service organization to prepare its payroll, the
. company's auditors
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A.
B.
C.
D.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A.
B.
C.
D.
Economic viability.
Social responsibility.
Environmental responsibility.
Internal control over financial reporting.
A.
B.
C.
D.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A.
B.
C.
D.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A.
Compilation report.
B.
Standard unqualified audit report.
C.
Examination report on a forecast.
D. Examination of internal control over financial reporting.
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A.
B.
C.
D.
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A.
B.
C.
D.
Three months.
Six months.
A year.
The user entity's fiscal period.
A.
B.
C.
D.
A.
B.
C.
D.
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Security.
Authentication.
Privacy.
Confidentiality.
A.
Performing analytical procedures.
B.
Confirming accounts receivable.
C. Inquiring about the accounting system and bookkeeping procedures.
D. Reading the financial statements for indications that they conform to
GAAP.
86 An accountant should reissue (not update) the prior year's report when
.
A. The accountant is a successor accountant performing a compilation
and a compilation report was issued in the prior year.
B. The accountant is a successor accountant performing a compilation,
and a review report was issued in the prior year.
C. The accountant issued a review report in the prior year and is
performing a compilation in the current year.
D. The accountant issued a compilation report in the prior year and is
performing a review in the current year.
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A.
Withdraw from the engagement.
B.
Issue an adverse opinion.
C. Ignore the departure because the financial statements do not purport
to be in accordance with GAAP.
D. Disclose the departure in the body of the accountant's report.
88 When an accountant is associated with a financial statement as part of
. a personal financial planning engagement, the accountant's report
should include a statement that
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A.
B.
C.
D.
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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108 For each term listed below (items 1-5) select the correct term (items A.
F).
A. Attestation
B. Assurance service
C. Compilation
D. Trust service
E. Review service
F. Service organization
____ 1. An engagement in which a practitioner provides limited
assurance about financial information.
____ 2. A situation in which the practitioner assists in assembling
financial information.
____ 3. An activity that results in a report on the subject matter or a
claim about subject matter that is the responsibility of another party.
____ 4. An entity that provides a service to another company regarding
the processing of transactions or information.
____ 5. Professional service aimed at improving the quality of
information both financial and nonfinancial for decision makers.
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109 Complete the key words, names, and phrases in the following
.
accountant's report on a review of financial statements (balance sheet
and statements of income, comprehensive income, retained earnings,
and cash flows) of a nonissuer.
We have ___________ the accompanying _____________ of Dandy
Company as of December 31, 2012 and 2011, and the
_____________________________________ ___________________________. A
review includes primarily applying ________ _____________ to
management's ______________ and making ________________ __________.
A review is substantially ____________________ than an audit, the
objective of which is the ___________________ regarding the financial
statements ___________________. Accordingly, we
_____________________________.
_______________ is responsible for the ____________________________ of
the financial statements ______________________________________________
and for designing, implementing, and __________________________
relevant to the preparation and fair presentation of the financial
statements.
Our responsibility is to ___________________ in accordance with
____________ _____________________________________ issued by the
American Institute of Certified Public Accountants. Those standards
_________________________ to obtain _______________ that there are
_____________________ that should be made to the financial statements.
We believe that the ___________________ provide a ___________________
for our report.
Based on our review, we are ________ of any ________________ that
should be made to the accompanying financial statements in order for
them to be in ____________ ________________________________.
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Essay Questions
110 Review work on unaudited financial statements consists primarily of
.
conducting inquiries, performing analytical procedures, and obtaining
a management representation letter. List the typical procedures
accountants would perform on a review engagement.
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113 Public accounting firms have consistently looked for additional services
.
that might increase their profitability. To that end, CPAs can provide
value to clients with assurance services.
Required:
Discuss each of the following topics.
A. Describe two of the services identified by the AICPA.
B. Why would the public prefer to have a public accounting firm as a
provider of these services?
C. What are the possible negative consequences for public accounting
firms if they provide services outside the realm of traditional
accounting services?
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114 Big Ben's Toy (BBT) Company has recently outsourced its payroll
.
operation to Mary's Payroll Service (MPS). MPS receives the changes to
the payroll database (hirings, firings, rate increases, etc.) and the
number of hours worked for all hourly employees. MPS calculates the
payroll and sends BBT printed payroll checks and a payroll register.
BBT then transfers an appropriate amount into its payroll bank account
and distributes the checks. MPS also provides a list of payments to be
made to third parties (IRS, insurance, pension plan, etc.). Accounts
payable uses the list of third-party payments to make appropriate
payments.
You have been hired to perform an audit of BBT Company. During your
opening meeting with BBT management, you state that your audit
plan includes inquiries of MPS and a review of the AT 801 report on
internal controls at MPS. BBT's management is confused and states
that BBT should not have to pay you to review controls at another
organization.
Prepare a brief explanation for BBT's management as to why it is
necessary to review the controls at MPS and the importance of this
review to BBT Company.
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2.
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3.
4.
5.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Topic: Unaudited Financial Statements: Reviews and Compilations
6.
7.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
8.
9.
10.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
11.
AACSB: Communication
AICPA BB: Industry
AICPA BB: Legal
AICPA FN: Decision Making
AICPA FN: Reporting
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: A-03 Explain auditors' responsibilities related to reporting on interim financial information.
Topic: Responsibilities Related to Reporting on Interim Financial Information
12.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
13.
14.
15.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
A.
Information technology.
B. The shift from the industrial age to the knowledge age.
C.
Globalization.
D. Merging of corporations creating fewer audit opportunities.
AACSB: Analytic
AICPA BB: Marketing
AICPA FN: Risk Analysis
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: A-05 Explain and provide examples of assurance services engagements.
Source: Original
Topic: Assurance Services
17.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
18.
19.
A.
B.
C.
D.
20.
A.
Security from unauthorized use.
B. Availability of the system, products, or services.
C. Proficiency in preparing transactions.
D.
Confidentiality of information.
AACSB: Analytic
AICPA BB: Marketing
AICPA FN: Risk Analysis
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-05 Explain and provide examples of assurance services engagements.
Source: Original
Topic: Assurance Services
21.
A.
B.
C.
D.
WebTrust.
SysTrust.
XBRL.
WebSecure.
AACSB: Analytic
AICPA BB: Marketing
AICPA FN: Risk Analysis
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-05 Explain and provide examples of assurance services engagements.
Source: AICPA
Topic: Assurance Services
22.
Extensible Business Reporting Language (XBRL) provides a computerreadable identifying tag for each individual item of data. The
advantages of XBRL include all of the following except that it
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
23.
24.
A.
Only examinations.
B. Examinations and assurance services.
C. Examinations, reviews, and agreed-upon procedures.
D. Examinations, reviews, compilations, agreed-upon procedures and
assurance services.
AACSB: Analytic
AICPA BB: Marketing
AICPA FN: Research
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Source: Original
Topic: Attestation
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
25.
26.
Shelly's Bank has loaned money to Pete's Auto Supply. The loan is
collateralized by inventory. The loan also requires a CPA to observe
Pete's count of the inventory and trace sampled items to the vendor
invoices in order to determine that the value of inventory is not
misstated. This service would be
A.
B.
C.
D.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
27.
A.
The report to include an opinion.
B. The report to identify the subject matter of the assertion being
reported on.
C. The report requires a statement that the presentation is not in
accordance with GAAP.
D. The report requires a disclosure of the procedures performed
during the attestation.
AACSB: Communication
AICPA BB: Legal
AICPA FN: Reporting
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Source: Original
Topic: Attestation
28.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
29.
30.
A.
The client's controller.
B.
The independent accountant.
C. The client's vice president of marketing.
D. A client employee named in a contract or regulation as being
responsible for the information.
AACSB: Communication
AICPA BB: Legal
AICPA FN: Reporting
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Source: Original
Topic: Attestation
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
31.
32.
A. Report on the year Y review and reissue the year X audit report.
B. Provide only the report concerning the year Y review.
C. Reissue the year X audit report with an explanatory paragraph
disclosing that only a review was performed on year Y.
D. Notify the client that prior-year audited financial statements
cannot be presented when the current-year statements have not
been audited.
AACSB: Communication
AICPA BB: Legal
AICPA FN: Risk Analysis
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Source: Original
Topic: Review
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33.
34.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
35.
36.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
37.
38.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Difficulty: 2 Medium
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Source: AICPA
Topic: Attestation
39.
40.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
41.
42.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Source: AICPA
Topic: Attestation
43.
44.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Topic: Attestation
45.
46.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Topic: Attestation
47.
A.
Assess planning materiality.
B.
Assess inherent risk.
C. Confirm restrictions with applicable third parties.
D.
Consider subsequent events.
AACSB: Analytic
AICPA BB: Legal
AICPA FN: Risk Analysis
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Source: Original
Topic: Compilation
48.
A.
An attestation was not performed.
B. Management had not established sufficient criteria for an opinion
to be issued.
C. The auditor is providing negative assurance.
D.
A disclaimer of opinion is presented.
AACSB: Analytic
AICPA BB: Legal
AICPA FN: Risk Analysis
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Source: Original
Topic: Review
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49.
50.
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51.
In a compilation engagement,
A.
B.
C.
D.
AACSB: Analytic
AICPA BB: Legal
AICPA FN: Risk Analysis
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Source: Original
Topic: Compilation
52.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
53.
A.
In all cases.
B. When it has not been labeled as "unaudited."
C. When it is material to the financial statement users.
D. When the information has been reviewed rather than audited.
AACSB: Analytic
AICPA BB: Legal
AICPA FN: Risk Analysis
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: A-03 Explain auditors' responsibilities related to reporting on interim financial information.
Source: Original
Topic: Interim Statements
54.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
55.
A.
Balance Sheet.
B. Statement of Assets, Liabilities, and Owner's Equity.
C. Statement of Revenue and Expenses.
D. Statement of Change in Partners' Capital Accounts.
AACSB: Analytic
AICPA BB: Legal
AICPA FN: Risk Analysis
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: A-04 Define; explain; and give examples of other special reports provided by auditors;
including specified elements of financial statements; special purpose frameworks and application of
requirements of appropriate financial reporting frameworks.
Source: Original
Topic: Special Purpose Frameworks
56.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
57.
58.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
59.
60.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
61.
62.
A.
A description of its internal controls.
B.
A type one service auditors' report.
C.
A type two service auditors' report.
D. A service organization control (SOC) 3 report.
AACSB: Analytic
AICPA BB: Legal
AICPA FN: Risk Analysis
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Source: Original
Topic: Attestation
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
63.
64.
A.
B.
C.
D.
Economic viability.
Social responsibility.
Environmental responsibility.
Internal control over financial reporting.
AACSB: Analytic
AICPA BB: Marketing
AICPA FN: Risk Analysis
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: A-05 Explain and provide examples of assurance services engagements.
Source: Original
Topic: Assurance Services
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
65.
A.
B.
C.
D.
66.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
67.
A.
B.
C.
D.
68.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
69.
70.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Source: Original
Topic: Attestation
71.
72.
A.
Compilation report.
B.
Standard unqualified audit report.
C.
Examination report on a forecast.
D. Examination of internal control over financial reporting.
Reference: Question also found in textbook
AACSB: Analytic
AICPA BB: Legal
AICPA FN: Reporting
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Source: Original
Topic: Compilation
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
73.
74.
A.
B.
C.
D.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
75.
76.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Difficulty: 2 Medium
Learning Objective: A-03 Explain auditors' responsibilities related to reporting on interim financial information.
Source: Original
Topic: Interim Statements
77.
78.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
79.
A.
B.
C.
D.
Three months.
Six months.
A year.
The user entity's fiscal period.
80.
A.
B.
C.
D.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
81.
A.
B.
C.
D.
82.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
83.
84.
A.
B.
C.
D.
Security.
Authentication.
Privacy.
Confidentiality.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
85.
A.
Performing analytical procedures.
B.
Confirming accounts receivable.
C. Inquiring about the accounting system and bookkeeping
procedures.
D. Reading the financial statements for indications that they conform
to GAAP.
Reference: Question also found in study guide
AACSB: Analytic
AICPA BB: Legal
AICPA FN: Research
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Source: Original
Topic: Review
86.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Source: Original
Topic: Review and Compilation
87.
A.
Withdraw from the engagement.
B.
Issue an adverse opinion.
C. Ignore the departure because the financial statements do not
purport to be in accordance with GAAP.
D. Disclose the departure in the body of the accountant's report.
Reference: Question also found in study guide
AACSB: Communication
AICPA BB: Legal
AICPA FN: Reporting
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Source: Original
Topic: Compilation
88.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Difficulty: 2 Medium
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Source: Original
Topic: Compilation
89.
90.
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
91.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
92.
93.
A.
B.
C.
D.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
95.
96.
97.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
98.
99.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
1. C, 2. F, 3. B, 4. D, 5. A
AACSB: Communication
AICPA BB: Legal
AICPA FN: Reporting
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Learning Objective: A-03 Explain auditors' responsibilities related to reporting on interim financial information.
Learning Objective: A-04 Define; explain; and give examples of other special reports provided by auditors;
including specified elements of financial statements; special purpose frameworks and application of
requirements of appropriate financial reporting frameworks.
Source: Original
Topic: Other Reports
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
1. D, 2. A, 3. E, 4. B, 5. C
AACSB: Communication
AICPA BB: Legal
AICPA FN: Reporting
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Learning Objective: A-03 Explain auditors' responsibilities related to reporting on interim financial information.
Learning Objective: A-04 Define; explain; and give examples of other special reports provided by auditors;
including specified elements of financial statements; special purpose frameworks and application of
requirements of appropriate financial reporting frameworks.
Source: Original
Topic: Other Reports
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
108. For each term listed below (items 1-5) select the correct term (items
A-F).
A. Attestation
B. Assurance service
C. Compilation
D. Trust service
E. Review service
F. Service organization
____ 1. An engagement in which a practitioner provides limited
assurance about financial information.
____ 2. A situation in which the practitioner assists in assembling
financial information.
____ 3. An activity that results in a report on the subject matter or a
claim about subject matter that is the responsibility of another party.
____ 4. An entity that provides a service to another company
regarding the processing of transactions or information.
____ 5. Professional service aimed at improving the quality of
information both financial and nonfinancial for decision makers.
1. E, 2. C, 3. A, 4. F, 5. B
AACSB: Analytic
AICPA BB: Marketing
AICPA FN: Research
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Learning Objective: A-02 Describe reviews and compilations of unaudited financial statements and prepare
appropriate reports given specific factual circumstances.
Learning Objective: A-05 Explain and provide examples of assurance services engagements.
Source: Original
Topic: Other Reports
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
109. Complete the key words, names, and phrases in the following
accountant's report on a review of financial statements (balance
sheet and statements of income, comprehensive income, retained
earnings, and cash flows) of a nonissuer.
We have ___________ the accompanying _____________ of Dandy
Company as of December 31, 2012 and 2011, and the
_____________________________________ ___________________________. A
review includes primarily applying ________ _____________ to
management's ______________ and making ________________ __________.
A review is substantially ____________________ than an audit, the
objective of which is the ___________________ regarding the financial
statements ___________________. Accordingly, we
_____________________________.
_______________ is responsible for the ____________________________ of
the financial statements
______________________________________________ and for designing,
implementing, and __________________________ relevant to the
preparation and fair presentation of the financial statements.
Our responsibility is to ___________________ in accordance with
____________ _____________________________________ issued by the
American Institute of Certified Public Accountants. Those standards
_________________________ to obtain _______________ that there are
_____________________ that should be made to the financial
statements. We believe that the ___________________ provide a
___________________ for our report.
Based on our review, we are ________ of any ________________ that
should be made to the accompanying financial statements in order
for them to be in ____________ ________________________________.
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Essay Questions
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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114. Big Ben's Toy (BBT) Company has recently outsourced its payroll
operation to Mary's Payroll Service (MPS). MPS receives the changes
to the payroll database (hirings, firings, rate increases, etc.) and the
number of hours worked for all hourly employees. MPS calculates the
payroll and sends BBT printed payroll checks and a payroll register.
BBT then transfers an appropriate amount into its payroll bank
account and distributes the checks. MPS also provides a list of
payments to be made to third parties (IRS, insurance, pension plan,
etc.). Accounts payable uses the list of third-party payments to make
appropriate payments.
You have been hired to perform an audit of BBT Company. During
your opening meeting with BBT management, you state that your
audit plan includes inquiries of MPS and a review of the AT 801 report
on internal controls at MPS. BBT's management is confused and
states that BBT should not have to pay you to review controls at
another organization.
Prepare a brief explanation for BBT's management as to why it is
necessary to review the controls at MPS and the importance of this
review to BBT Company.
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Difficulty: 3 Hard
Learning Objective: A-01 Explain and provide examples of attestation engagements.
Source: Original
Topic: Attestation
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.