Question 1

Which of the following items is not contained in the standard report on a review of separately issued interim financial statements of public companies?

Accepted Answer

The standard report on a review of separately issued interim financial statements of public companies does not include positive assurance that the auditor is not aware of any material departures from GAAP. Instead, the report provides negative assurance that the auditor is not aware of any material modifications that should be made to the financial statements in order for them to be in accordance with GAAP.

Question 2

For which of the following special purpose financial statements is an emphasis-of-matter paragraph alerting readers about the preparation in accordance with the special purpose framework not required?

Accepted Answer

The regulatory basis for general use is a type of special purpose framework that is recognized by the AICPA as being acceptable for use by entities that are regulated by a government agency or other external regulatory body. Because this framework is accepted by the AICPA and has specific guidelines for preparation and presentation of financial statements, an emphasis-of-matter paragraph is not required to alert readers about its use. However, for the other special purpose frameworks listed (cash basis, tax basis, and contractual basis), an emphasis-of-matter paragraph may be required to alert readers about the unique nature of the framework and its impact on the financial statements.

Question 3

Which of the following statements is false regarding compilation procedures?

Accepted Answer

The answer of Which of the following statements is false...

Question 4

Which of the following is not a way that the disclosure and reporting requirements for interim financial statements differ from those for annual financial statements?

Accepted Answer

This is the only option that is not a difference between the disclosure and reporting requirements for interim and annual financial statements. All of the other options describe differences between the two types of statements.

Question 5

For which of the following special purpose financial statements is an other-matter paragraph restricting the use of the auditor's report required?

Accepted Answer

The answer of For which of the following special purpose...

Question 6

Other comprehensive bases of accounting do not include which of the following?

Accepted Answer

The answer of Other comprehensive bases of accounting do not...

Question 7

Which of the following engagements is sometimes referred to as bookkeeping services?

Accepted Answer

Compilations involve presenting financial information in the form of financial statements without the accountant providing any additional assurance. This is commonly referred to as bookkeeping services. Reviews, special reports, and audits involve varying degrees of assurance and additional procedures beyond bookkeeping.

Question 8

Which of the following situations is not one where the practitioner will modify the standard compilation report?

Accepted Answer

The answer of Which of the following situations is not...

Question 9

Craig Marks,CPA performs an audit of Treasure,Inc.,which keeps its financial statements on the tax basis of accounting.Craig is aware of this fact and audits the financial statements on the criteria of the tax basis.What type of engagement is this?

Accepted Answer

This engagement is an audit that will result in the issuance of a special report. The auditor is aware that the financial statements are being prepared on the tax basis of accounting and is conducting the audit on that basis. The audit will result in the issuance of a special report because the financial statements are not being prepared in accordance with GAAP.

Question 10

What are the performance standards required for interim review engagements on the quarterly financial information of public companies?

Accepted Answer

The answer of What are the performance standards required for...

Question 11

When forming an opinion on special purpose financial statements,which of the following items does the auditor not need to evaluate?

Accepted Answer

The answer of When forming an opinion on special purpose...

Question 12

Which one of the following reports is not a special report issued as a result of an examination?

Accepted Answer

The answer of Which one of the following reports is...

Question 13

Which of the following services provides limited assurance?

Accepted Answer

A review provides limited assurance, meaning the CPA is providing a moderate degree of assurance, less than an audit but more than a compilation.

Question 14

Which of the following procedures is not a review procedure for interim financial information?

Accepted Answer

The answer of Which of the following procedures is not...

Question 15

How many paragraphs does the standard review report for U.S.nonpublic companies or development stage companies have?

Accepted Answer

The standard review report for U.S. nonpublic companies or development stage companies has three paragraphs - an introductory paragraph, a management's responsibility paragraph, and an accountant's responsibility paragraph.

Question 16

In which of the following cases should the auditor's report on compliance not include a statement that nothing came to the auditor's attention that caused the auditor to believe that the entity failed to comply with specified aspects of the contractual agreements or regulatory requirements?

Accepted Answer

The answer of In which of the following cases should...

Question 17

Which one of the following procedures is not a standard procedure when performing a review?

Accepted Answer

The answer of Which one of the following procedures is...

Question 18

For which of the following special purpose financial statements is a dual opinion on a special purpose framework and GAAP required?

Accepted Answer

A dual opinion on a special purpose framework and GAAP is required for regulatory basis financial statements for general use. This is because regulatory authorities may require compliance with their own specific accounting and reporting requirements, which may differ from GAAP. As a result, a dual opinion is needed to provide users with both an assessment of compliance with the regulatory basis as well as any deviations from GAAP. Dual opinions are not required for cash basis, tax basis, or contractual basis financial statements.

Question 19

For which of the following special purpose financial statements is a description of purpose for which special purpose financial statements are prepared not required?

Accepted Answer