Question 1

This concept,while used by both internal and external auditors,is typically assessed quite differently for each.

Accepted Answer

Materiality is the concept that is assessed differently by internal and external auditors due to their differing objectives. External auditors focus on financial statement accuracy for external stakeholders, while internal auditors assess broader business risks and operational efficiencies.

Question 2

When engaged to compile the financial statements of a nonpublic entity,an accountant is required to possess a level of knowledge of the entity's accounting principles and practices.This requirement most likely will include obtaining a general understanding of the

Accepted Answer

When compiling the financial statements of a nonpublic entity, an accountant is required to have a level of knowledge of the entity's accounting principles and practices, which includes obtaining a general understanding of the qualifications of the entity's accounting personnel. This helps ensure that the financial statements are compiled with a reasonable understanding of the entity's accounting systems and practices.

Question 3

Explain each of the three PrimePlus Services typically offered by practitioners.

Accepted Answer

The answer of Explain each of the three PrimePlus Services...

Question 4

An agreed-upon procedures engagement is significantly more limited in scope than an examination.An accountant may perform an agreed-upon procedures attestation engagement for prospective financial statements provided that attestation standards are complied with and ten criteria are met.Identify five of the ten criteria below.

Accepted Answer

The answer of An agreed-upon procedures engagement is significantly more...

Question 5

Match the Trust Services Principle with its proper definition.

Accepted Answer

The answer of Match the Trust Services Principle with its...

Question 6

Match the attestation standard with the generally accepted auditing standard that is most similar in nature.

Accepted Answer

The answer of Match the attestation standard with the generally...

Question 7

During an engagement to review the financial statements of a nonpublic entity,an accountant becomes aware of a material departure from GAAP.If the accountant decides to modify the standard review report because management will not revise the financial statements,the accountant should

Accepted Answer

The correct approach when an accountant becomes aware of a material departure from GAAP and management will not revise the financial statements is to disclose the departure from GAAP in a separate paragraph of the report. This ensures that the users of the financial statements are made aware of the non-conformity with GAAP, which could affect their decision-making.

Question 8

To bridge the gap between a changing business environment and the guidance that was then available,the IIA developed a Professional Practices Framework.This framework consists of two broad categories of guidance.List these categories of guidance and what they include.

Accepted Answer

The answer of To bridge the gap between a changing...

Question 9

Which of the following represents the order from the least assurance to the most assurance provided for the types of services provided?

Accepted Answer

Compilation provides the least assurance as the accountant does not express any opinion or provide any assurance on the financial statements. Review provides limited assurance and consists of inquiry and analytical procedures. Audit provides the highest level of assurance and involves obtaining evidence and expressing an opinion on the financial statements. Therefore, the correct order is Compilation, Review, and Audit.

Question 10

How has the advancement in technology led to the creation of the Trust Services?

Accepted Answer

The answer of How has the advancement in technology led...

Question 11

Jones Retailing,a nonpublic entity,has asked Winters,CPA,to compile financial statements that omit substantially all disclosures required by generally accepted accounting principles.Winters may compile such financial statements,provided the

Accepted Answer

Winters may compile financial statements that omit substantially all disclosures required by GAAP as long as the omission is not undertaken to mislead the users of the financial statements and is properly disclosed in the accountant's report. This allows for the client's request to be fulfilled without compromising the integrity of the financial statements.

Question 12

Which set of standards was created by the AICPA to cover services relating to unaudited financial statements?

Accepted Answer

The set of standards created by the AICPA to cover services relating to unaudited financial statements is Statements on Standards for Accounting and Review Services (SSARS).

Question 13

As with most professionals,internal auditors must follow guidelines promoting ethical conduct.The IIA Code of Ethics is important for internal auditors because the reliability of their work depends on a reputation for a high level of personal integrity.The Code of Ethics consists of four main principles of ethical conduct and some associated rules that underpin the expected conduct of IIA members.List the four main principles of the Code of Ethics and explain each.

Accepted Answer

The answer of As with most professionals,internal auditors must follow...

Question 14

For an auditor to examine management's assertions about the effectiveness of internal control in an attestation engagement,three conditions are necessary.Briefly explain them.

Accepted Answer

The answer of For an auditor to examine management's assertions...

Question 15

A CPA's report on agreed-upon procedures related to management's assertion about an entity's compliance with specified requirements should contain

Accepted Answer

A report on agreed-upon procedures does not provide an opinion on the subject matter, but rather presents the procedures performed and the findings resulting from those procedures. Therefore, option B is incorrect. The report also does not provide any level of assurance, so option C is incorrect. However, A is correct because the report must include a statement of limitations on the use of the report to explain the users that the procedures were performed only for specified purposes and that the report does not provide any form of assurance. Additionally, option D is not necessary because acknowledging responsibility for the sufficiency of the procedures is a fundamental aspect of performing agreed-upon procedures.

Question 16

In your own words,describe how the Institute of Internal Auditors (IIA)defines internal auditing?

Accepted Answer

The answer of In your own words,describe how the Institute...

Question 17

An entity's WebTrust seal is managed by

Accepted Answer

A WebTrust seal, also known as a website trust seal, is managed by a third-party service organization that provides website certification services. This organization verifies a website's trustworthiness, security, and privacy practices to ensure that it meets industry standards and best practices. The seal is displayed on the website to provide assurance to users that the website is secure and trustworthy. The CPA who performed the service may be involved in the certification process, but the management of the seal itself is handled by the third-party organization. The AICPA is a professional organization for CPAs and is not directly involved in managing WebTrust seals. The entity receiving the seal is responsible for complying with the certification criteria but does not manage the seal itself.

Question 18

Internal auditors fall into two primary categories-assurance services and consulting services.Briefly explain these two categories in relation to internal auditors.

Accepted Answer

The answer of Internal auditors fall into two primary categories-assurance...

Quiz 21: Assurance,Attestation,amd Internal Auditing Services-professional Judgement Module