Deck 20: Additional Assurance Services: Other Information

Question 1

Suitable criteria in an attestation engagement may be available:  
$\begin{array}{lll}&\text { Publicly } & \text { In CPA's Repor } \\\text { A } & \text { Yes } & \text { Yes } \\\text { B. } & \text { Yes } & \text { No } \\\text { C. } & \text { No } & \text { Yes } \\\text { D. } & \text { No } & \text { No }\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Answer 1

Option A

Question 2

Assurance services improve the quality of information or its context for decision makers.

Answer 2

True

Question 3

Which of the following are Trust Services principles?  
$$\begin{array} { c c c } & \text { Security } & \text { Availability } \\\text { A } & \text { Yes } & \text { Yes } \\\text { B. } & \text { Yes } & \text { No } \\\text { C. } & \text { No } & \text { Yes } \\\text { D. } & \text { No } & \text { No }\end{array}$$

A)Option A
B)Option B
C)Option C
D)Option D

Answer 3

Option A

Question 4

When performing an attestation examination engagement,the standards do not require which of the following?

A)Assertion.
B)Practitioner independence.
C)Subject matter.
D)Suitable criteria.

Question 5

Trust Services are a part of the AICPA's vision that increases trust in annual historical financial statements.

Question 6

Attestation services are similar,but go beyond assurance services in scope of procedures and reporting.

Question 7

Practitioners may report on either an assertion about the subject matter or on the subject matter itself for most attestation engagements.

Question 8

Assurance services performed for decision makers may address the:  
$\begin{array} { c c c } & \text { Quality of information }& \text { Context of information }\\\end{array}$
A. $\begin{array} { c c c } \quad\quad\quad\text { Yes } &\quad\quad\quad\quad\quad\quad\quad \text { Yes } \\\end{array}$
B. $\begin{array} { c c c }\quad\quad\quad \text { Yes } &\quad\quad\quad\quad \quad\quad\quad\text { No } \\\end{array}$
C. $\begin{array} { c c c } \quad\quad\quad\text { No } & \quad\quad\quad\quad\quad\quad\quad\text {Yes } \\\end{array}$
D. $\begin{array} { c c c }\quad\quad\quad \text { No } &\quad\quad\quad\quad \quad\quad\quad\text { No }\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question 9

Independence is required for the performance for some,but not all assurance services.

Question 10

Which of the following is least likely to be structured using the AICPA attestation standards?

A)A review of nonpublic interim information.
B)A SysTrust engagement.
C)A "SOC 3" service organization controls engagement.
D)A review of management's discussion and analysis.

Question 11

Which of the following is the least likely to be considered subject matter of an attestation engagement?

A)Affirmation.
B)Behavior.
C)Historical event.
D)Systems and processes.

Question 12

Which of the following engagements is most likely to consider security,availability,processing integrity,confidentiality,and privacy relating to a system?

A)Internal control over financial reporting.
B)Trust Services.
C)Website Associate.
D)Financial statement audit.

Question 13

Reviews of management's discussion and analysis for an annual or an interim period are not allowed by the AICPA.

Question 14

Trust Services engagements include gathering evidence that the client's system is operating effectively.

Question 15

Attestation risk,like audit risk consists of three components-inherent risk,control risk,and detection risk.

Question 16

Quantum,CPA,was engaged by a group of oil and gas royalty recipients to apply agreed-upon procedures to financial data supplied by Ziphar Co.regarding Ziphar's written assertion about its compliance with contractual requirements to pay royalties.Quantum's report on these agreed-upon procedures should contain a(n):

A)Disclaimer of opinion about the fair presentation of Ziphar's financial statements.
B)List of the procedures performed (or reference thereto)and Quantum's findings.
C)Opinion about the effectiveness of Ziphar's internal control activities concerning royalty payments.
D)Acknowledgment that the sufficiency of the procedures is solely Quantum's responsibility.

Question 17

The attestation standards prohibit the examination of prospective financial statements.

Question 18

SysTrust engagements relate only to database systems.

Question 19

A CPA is engaged to perform an engagement of a nonpublic company following attestation standards.During the examination,the CPA discovers a material deviation from the criteria on which the subject matter was being evaluated.The CPA's conclusion may be on:  
$\begin{array} { c c c } & \text { Subject Matter } & \text { Written Assertion } \\\end{array}$
A. $\begin{array} { c c c } \quad\quad\quad\text { Yes } &\quad\quad\quad\quad \text { Yes } \\\end{array}$
B. $\begin{array} { c c c }\quad\quad\quad \text { Yes } &\quad\quad\quad\quad \text { No } \\\end{array}$
C. $\begin{array} { c c c } \quad\quad\quad\text { No } & \quad\quad\quad\quad\text {Yes } \\\end{array}$
D. $\begin{array} { c c c }\quad\quad\quad \text { No } &\quad\quad\quad\quad \text { No }\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question 20

Which of the following is least likely to be included in an agreed-upon procedures attestation engagement report?

A)The specified party takes responsibility for the sufficiency of procedures.
B)Use of the report is restricted.
C)Limited assurance on the information presented.
D)A summary of procedures performed.

Question 21

When a practitioner examines projected financial statements,the practitioner's report should include a separate paragraph that:

A)Describes the limitations on the usefulness of the presentation.
B)Provides an explanation of the differences between an examination and a review.
C)States that the accountant is responsible for events and circumstances for a period not exceeding one year after the report's date.
D)Disclaims an opinion on whether the assumptions provide a reasonable basis for the projection.

Question 22

When a financial forecast fails to disclose a significant assumption used to prepare that forecast,which of the following reports become appropriate?  
$$\begin{array} { c c } \text { Qualified } & \text { Adverse } \\\text { Yes } & \text { Yes } \\\text { Yes } & \text { No } \\\text { No } & \text { Yes } \\\text { No } & \text { No }\end{array}$$

A)Option A
B)Option B
C)Option C
D)Option D

Question 23

An international information format designed specifically for business information is:

A)ERP.
B)XML.
C)Integrated Systems Format.
D)XBRL.

Question 24

When reporting upon a review engagement on an entity's management discussion and analysis,the report is ordinarily:

A)A general use report.
B)A restricted use report.
C)Required to include a disclaimer of opinion.
D)Included with the entity's report on internal control over financial reporting.

Question 25

Which of the following is not currently an acceptable form of association with prospective financial statements?

A)Compilation.
B)Review.
C)Agreed-upon procedures.
D)Examination.

Question 26

Under which principles is a cybersecurity engagement is currently being developed by the AICPA?

A)Generally Accepted Auditing Standards.
B)Government Cybersecurity Principles.
C)Assurance Procedures Standards.
D)Trust Services Principles and Criteria

Question 27

Which of the following are required on all attestation engagements?  
$\begin{array} { c c c } &\quad\text {Suitable Criteria }&\text { Subject Matter }\\\end{array}$
A. $\begin{array} { c c c } \quad\quad\quad\text { Yes } &\quad\quad\quad\quad \text { Yes } \\\end{array}$
B. $\begin{array} { c c c }\quad\quad\quad \text { Yes } &\quad\quad\quad\quad \text { No } \\\end{array}$
C. $\begin{array} { c c c } \quad\quad\quad\text { No } & \quad\quad\quad\quad\text {Yes } \\\end{array}$
D. $\begin{array} { c c c }\quad\quad\quad \text { No } &\quad\quad\quad\quad \text { No }\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question 28

Many new assurance services are performed in accordance with Statements on:

A)Standards for Attestation Services.
B)Generally Accepted Assurance Standards.
C)Auditing Standards.
D)Accounting for other Assurance Services.

Question 29

The organization that was established to identify,develop,and communicate new assurance service opportunities is the:

A)Assurance Services Executive Committee.
B)Attestation Standards Board.
C)Auditing Standards Board.
D)Counsel of Executives.

Question 30

A practitioner's unqualified (unmodified)opinion based upon an examination may ordinarily be on:  
$\begin{array} { c c c } &\quad\text {Suitable Criteria }&\text { Assertion }\\\end{array}$
A. $\begin{array} { c c c } \quad\quad\quad\text { Yes } &\quad\quad\quad\quad \text { Yes } \\\end{array}$
B. $\begin{array} { c c c }\quad\quad\quad \text { Yes } &\quad\quad\quad\quad \text { No } \\\end{array}$
C. $\begin{array} { c c c } \quad\quad\quad\text { No } & \quad\quad\quad\quad\text {Yes } \\\end{array}$
D. $\begin{array} { c c c }\quad\quad\quad \text { No } &\quad\quad\quad\quad \text { No }\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question 31

Which of the following is correct relating to an engagement to apply agreed-upon procedures to prospective financial statements?

A)Use of the report is restricted to the specified users.
B)Such engagements are permissible for forecasts but not for projections.
C)Responsibility for the adequacy of the procedures performed is taken by the practitioner.
D)Such engagements are not permissible under the professional standards.

Question 32

A CPA service relating to clients who are senior citizens is referred to as:

A)ElderAssure.
B)PrimePlus/ElderCare Services.
C)Elder Care Plus.
D)Prime of Life Care.

Question 33

A Type 2 service auditor's report addresses:

A)Only management's description and design of its controls.
B)Management's description and design of its controls and control operating effectiveness.
C)Only control operating effectiveness.
D)Control operating effectiveness and primary assertion reliability.

Question 34

The five principles of a reliable system considered in a Trust Services engagement include confidentiality,availability,processing integrity,privacy,and:

A)Control.
B)Security.
C)Relevance.
D)Reliability.

Question 35

To accept an engagement to examine a client's MD&A for annual financial statements,the practitioners ordinarily must have:

A)Audited the most recent financial statement period to which the MD&A applies.
B)Determined that the client reports to the Securities and Exchange Commission.
C)Performed a detailed analysis of the client's controls over decision making.
D)Reviewed the quarterly MD&A information.

Question 36

Which of the following is correct concerning a service auditor and a SysTrust report?

A)They both result in restricted use reports.
B)A client must engage the CPA to perform both services as neither may be selected independently of the other.
C)They both address system reliability.
D)They represent different names for the same service.

Question 37

Of the following,which is most likely to be the subject matter of an attestation engagement?

A)Physical characteristics.
B)Suitable criteria.
C)Attestation risk.
D)Absolute assurance.

Question 38

Under the attestation standards,in which of the following circumstances is a review report least likely to be issued?

A)Criteria are agreed-upon or only available to specified users.
B)Established criteria exist,but other criteria are used.
C)The subject matter departs from the criteria.
D)A significant limitation on the scope of the engagement has occurred.

Question 39

Providing assurance using a series of reports provided simultaneously or shortly after the related information is released is referred to as:

A)Continuous auditing.
B)Serial auditing.
C)Systems reliability auditing.
D)Simultaneity auditing.

Question 40

Which attest engagement aligns most directly with a financial statement audit in terms of assurance provided?

A)Agreed-upon procedures.
B)Evaluation.
C)Examination.
D)Review.

Question 41

Negative assurance is most likely to be provided in a practitioner's report with:

A)A compilation report.
B)Agreed-upon procedures having been performed.
C)An examination report with an adverse opinion.
D)A review report,

Question 42

The Warren Corporation wants to enhance the market value of its stock by including in its annual report a financial forecast for the next year.They also would like to have their auditors examine the forecast.
a.Define a financial forecast.
b.Is an examination of a financial forecast similar in scope to a review of financial statements? Explain.

Question 43

Which of the following is a prospective financial statement for general use upon which a practitioner may appropriately report?

A)Financial projection.
B)Partial presentation.
C)Pro forma financial statement.
D)Financial forecast.

Question 44

Criteria that are objective and permit reasonably consistent measurement for assurance services purposes are referred to as:

A)Examination criteria.
B)General purpose criteria.
C)Special purpose criteria.
D)Suitable criteria.

Question 45

Which of the following is correct relating to service organization control (SOC)reports referred to as "SOC 2" reports?

A)They are primarily to assist financial statement auditors when processing services have been outsourced to a service provider.
B)They are generally available to anyone.
C)They relate most directly to internal control over financial reporting.
D)They are meant for management of service organizations,user entities,and certain other specified entities.

Question 46

The party responsible for assumptions identified in the preparation of prospective financial statements is usually:

A)A third-party lending institution.
B)The client's management.
C)The reporting accountant.
D)The client's independent auditor.

Question 47

When a CPA is associated with a forecast,all of the following should be disclosed except the:

A)Sources of information.
B)Character of the work performed by the CPA.
C)Major assumptions in the preparation of the forecast.
D)Probability of achieving estimates.

Question 48

Independence is required for attestation services related to:  
$\begin{array} { c c c } & \text {Historical financial statements} & \text { Other attestation engagements } \\\end{array}$
A. $\begin{array} { c c c } \quad\quad\quad\text { Yes } &\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad \text { Yes } \\\end{array}$
B. $\begin{array} { c c c }\quad\quad\quad \text { Yes } &\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad \text { No } \\\end{array}$
C. $\begin{array} { c c c } \quad\quad\quad\text { No } & \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text {Yes } \\\end{array}$
D. $\begin{array} { c c c }\quad\quad\quad \text { No } &\quad\quad\quad\quad \quad\quad\quad\quad\quad\quad\quad\quad\quad\text { No }\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question 49

Given one or more hypothetical assumptions,a responsible party may prepare an entity's expected financial position,results of operations,and changes in financial position.Such prospective financial statements are known as:

A)Pro forma financial statements.
B)Financial projections.
C)Partial Presentation.
D)Financial forecasts.

Question 50

The AICPA has outlined auditor reports based on three services that may be provided on service organization controls (SOC).The type most directly related to SysTrust is:

A)SOC 1.
B)SOC SYS.
C)SOC 3.
D)SOC OC.

Question 51

When an accountant compiles a financial forecast,the accountant's report should include a(n):

A)Explanation of the differences between a financial forecast and a financial projection.
B)Caveat that the prospective results of the financial forecast may not be achieved.
C)Statement that the accountant's responsibility to update the report is limited to one year.
D)Disclaimer of opinion on the reliability of the entity's internal controls.

Question 52

Which of the following are Trust Services principles?  
$$\begin{array} { c c c } & \text { Availability } & \text { Processing Integrity } \\\text { A } & \text { Yes } & \text { Yes } \\\text { B. } & \text { Yes } & \text { No } \\\text { C. } & \text { No } & \text { Yes }\end{array}$$

A)Option A
B)Option B
C)Option C
D)Option D

Question 53

Accepting an engagement to examine an entity's financial projections most likely would be appropriate if the projections were to be distributed to:

A)All employees who work for the entity.
B)Potential stockholders who request a prospectus or a registration statement.
C)A bank with which the entity is negotiating for a loan.
D)All stockholders of record as of the report date.

Question 54

The type of service organization control (SOC)report that is for general use is:

A)SOC 1.
B)SOC 2.
C)SOC 3.
D)SOC 4.

Question 55

Following are a set of statements.For each statement,indicate with an "X" whether it is correct with respect to an examination,a review,and/or an agreed-upon procedures engagement.Each statement may relate to none,one or more services.