Auditing I - Chapter 14

Which of the following is an example of a special purpose framework?

• A tax basis of accounting for a set of financial statements that accompany an entity’s tax return.

• A standard accounting basis for a set of financial statements that accompany an entity’s annual report.

• A cash basis of accounting for a set of financial statements that accompany an entity’s quarterly report.

• A regulatory basis of accounting for a set of financial statements that accompany an entity’s IPO prospectus.

What could be a reason for an entity to prepare special purpose financial information?

• To meet the requirements of a regulator.

• To accompany an entity’s annual report.

• To provide information for shareholders’ meeting.

• To accompany an entity’s IPO prospectus.

What should the auditor's report on the summary financial statements identify?

• The detailed financial statements

• The summary financial statements on which the auditor is reporting

• The auditor's personal opinion on the financial statements

If the auditor's report date on the summary financial statements is later than that on the audited financial statements, what should be stated?

• The summary financial statements reflect all events occurring after the audited financial statements' report date

• The summary financial statements do not reflect the effects of events that occurred subsequent to the audited financial statements' report date

• The summary financial statements are a complete substitute for the audited financial statements

What does the statement that the summary financial statements do not contain all the disclosures required by the financial reporting framework imply?

• Reading the summary financial statements is equivalent to reading the audited financial statements

• Reading the summary financial statements is not a substitute for reading the audited financial statements

• The summary financial statements are more comprehensive than the audited financial statements

In the examination of prospective financial information, the financial information can be in the form of a prospective, which is prepared on the basis of management’s assumptions as to future events (best-estimate assumptions)

• True

• False

Which of the following is NOT a Related Service Engagement?

• Agreed-Upon Procedures

• Compilations

• Sustainability Reporting

In Assurance Report on Controls at a Service Organization, a Type 1 Report is a report on the description, design, and operating effectiveness of controls.

• True

• False

In a Compilation Engagement, the accountant is not required to make inquiries to assess the reliability and completeness of the information provided.

• True

• False

Is independence required for Agreed-Upon Procedures Engagements?

• Yes

• No