CHUCHUNESS_311-1

Which of the ff best describes “related services”?

• Audit and review of financial statements

• Assurance audit engagements

• Compilation and agreed upon procedures engagements

• Review, compilation and agreed upon procedures engagements

Which of the ff services provides moderate level of assurance?

• Audit

• Review

• Agreed upon procedures

• Compilation

The objective of a review of financial statements is to

• Express an opinion on the overall financial statements

• Carry our audit procedures agreed on with clients and other users of report

• Assist the client in the preparation of financial statements

• State whether anything has come to the auditor’s attention that indicates that the financial statements are not presented fairly.

When performing a review of financial statements, the CPA is required to

• Apply analytical procedures and make inquiries from third parties by sending confirmations

• Assess the effectiveness of the client’s accounting and internal control systems

• Obtain corroborative evidence to support management’s responses to inquiries

• Obtain understanding of the client’s business and industry.

When providing limited assurance that nothing came to the CPAs attention that would indicate that the financial statements are not in accordance with financial reporting standards, the CPA should:

• Obtain corroborative evidence to support management’s responses to inquiries

• Test the accounting records that identify inconsistencies with the prior year’s financial statements

• Understand the accounting principles of the industry in which the business entity operates

• Develop and audit program

A review does not provide assurance that the CPA will become aware of all significant matters that would be disclosed in an audit. However, if the CPA becomes aware that the information coming to his attention is incorrect, incomplete or otherwise unsatisfactory, he should

• Withdraw immediately from the engagement

• Perform additional procedures he deems necessary to achieve limited assurance

• Perform a complete audit and issue a standard audit report with appropriate qualifications

• Downgrade the engagement to a compilation and issue the appropriate report.

If the CPA has reason to believe that the information subject to review may be materially misstated, the CPA should

• Express a qualified negative assurance

• Express an adverse opinion

• Withdraw from the engagement

• Carry out additional or more extensive procedures

If there had been a material scope limitation on a review engagement the CPA may

• Express either qualified opinion or disclaim an opinion on the financial statements

• Not provide any assurance on the financial statements

• Issue the unqualified review report

• Issue an audit report that contains an unqualified opinion about the financial statements

Which of the ff is true of the report based on agreed upon procedures?

• The report is restricted to those parties who have agreed to the procedures to be performed

• The CPA provides the recipients of the report limited assurance as to reasonableness of the assertion(s) presented in the financial information

• The report states that the auditor has not recognized any basis that requires revision of financial statements

• The report should state that the procedures performed are limited to analytical procedures and inquiry.

Engagement to apply agreed upon procedures on certain accounts within a financial statement may be accepted provided

• The CPA has expressed opinion on the financial statements taken as a whole

• The CPA takes full responsibility for the adequacy of the procedures to be performed

• The CPA provides only a limited assurance about the reliability of the financial statements

• The distribution of the report is limited only to specified parties involved