Deck 20: Additional Assurance Services: Other Information

Question 1

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

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

Answer 1

A

Question 2

A practitioner may be engaged to perform a review of management's discussion and analysis for an annual or an interim period.

Answer 2

True

Question 3

In an engagement relating to a nonpublic company, conditions exist that result in a material deviation from the criteria against which the subject matter was evaluated during an examination performed following the attestation standards. The CPA's conclusion may be on: $$\begin{array} { | c | c | c | } \hline & \begin{array} { c } \text { Subject } \\\text { Matter }\end{array} & \begin{array} { c } \text { written } \\\text { Assertion }\end{array} \\\hline \text { A. } & \text { Yes } & \text { Yes } \\\hline \text { B. } & \text { Yes } & \text { No } \\\hline \text { C. } & \text { No } & \text { Yes } \\\hline \text { D. } & \text { No } & \text { No } \\\hline\end{array}$$

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

Answer 3

Option B

Question 4

Trust Services assure consumers that they will be satisfied with their purchases.

Question 5

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

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

Question 6

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 7

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

Question 8

Which of the following is least likely to be structured as an attest engagement?

A) An elder care engagement.
B) A SysTrust engagement.
C) An examination of internal control over financial reporting for a nonpublic company.
D) A review of management's discussion and analysis.

Question 9

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

Question 10

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

Question 11

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

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

Question 12

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 13

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

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

Question 14

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

Question 15

Independence is required for the performance of all assurance services.

Question 16

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 17

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

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

Question 18

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

Question 19

The attestation standards prohibit the examination of prospective financial statements.

Question 20

SysTrust engagements relate only to database systems.

Question 21

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 22

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 23

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 24

A CPA service relating elderly clients is referred to as:

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

Question 25

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 26

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 27

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 28

The WebTrust engagement relates most directly to:

A) Financial statements maintained on the Internet.
B) Health care facilities.
C) Risk assurance procedures.
D) Electronic commerce systems.

Question 29

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 30

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 31

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

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

Question 32

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 33

When a financial forecast fails to disclose a significant assumption used to prepare that forecast, which of the following reports become appropriate? $$\begin{array} { | c | c | c | } \hline & \text { Qualified } & \text { Adrerse } \\\hline \text { A. } & \text { Yes } & \text { Yes } \\\hline \text { B. } & \text { Yes } & \text { No } \\\hline \text { C. } & \text { No } & \text { Yes } \\\hline \text { D. } & \text { No } & \text { No } \\\hline\end{array}$$

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

Question 34

An international information format designed specifically for business information is:

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

Question 35

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

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

Question 36

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

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

Question 37

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 38

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 39

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 40

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

A) Historical events.
B) Suitable criteria.
C) Attestation risk.
D) Absolute assurance.

Question 41

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 42

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 43

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 44

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 45

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 46

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 47

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.

Question 48

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 49

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 50

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 51

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.