Question 1

Non-attestation reporting
For a compilation report,identify:
 A. far whom the ragat mey be perfarmed;
B. the pareduras the euditar muntaler;
C. type of answere provided;
D. and requirements regar ding auclitor inclependence

Accepted Answer

The answer of Non-attestation reporting
For a compilation report,identify:
 A. far...

Question 2

Leon Frank,CPA performs an audit of RedHen,Inc. ,which keeps its financial statements on the tax basis of accounting.Leon is aware of this fact and audits the financial statements on the criteria of the tax basis.This type of an engagement
A)is not accepted by the AICPA.
B)is an audit that will cause the issuance of a special report.
C)is actually just a compilation.
D)is only performed by tax accountants who do not provide attest services.

Accepted Answer

Auditing financial statements on the criteria of tax basis is an agreed-upon procedures engagement, which requires the issuance of a special report rather than an audit opinion. This engagement is accepted by the AICPA and can be performed by CPAs, but it is not equivalent to a compilation as it involves additional procedures to provide limited assurance on the financial statements.

Question 3

A review of financial statements requires more knowledge and evidence than
A)a compilation.
B)an audit.
C)an examination.
D)attestation.

Accepted Answer

A review of financial statements requires more knowledge and evidence than a compilation, as it involves limited assurance and analytical procedures, whereas a compilation involves presenting financial data without assurance.

Question 4

The use of another CPA firm by an audit firm to perform part of the engagement on a client's subsidiary will require the audit firm to
A)merge with the other CPA firm.
B)perform a peer review on the other CPA firm.
C)ensure the independence of the other CPA firm of the client.
D)list the other firm in the footnotes to the client's financial statements.

Accepted Answer

The use of another CPA firm by an audit firm to perform part of the engagement on a client's subsidiary will require the audit firm to ensure the independence of the other CPA firm of the client. This is essential to maintain the integrity and objectivity of the audit process. The other choices are not relevant in this context.

Question 5

Adverse opinions
Under what circumstances would an auditor issue an adverse opinion?

Accepted Answer

The answer of Adverse opinions
Under what circumstances would an auditor...

Question 6

A compilation report provides the user with which one of the following types of assurance?
A)No assurance.
B)Absolute assurance.
C)Limited assurance.
D)Negative assurance.

Accepted Answer

The answer of A compilation report provides the user with...

Question 7

When the auditor considers information that comes to his or her attention during the current year audit,but is related to prior year statements presented for comparative purposes,the report on the prior year is referred to as
A)a reissued report.
B)a shared report.
C)an updated report.
D)none of the above.

Accepted Answer

An updated report is when the auditor considers new information that affects prior year financial statements presented for comparative purposes and modifies the report accordingly.

Question 8

Types of Audit Opinions
What are the five basic types of financial statement audit reports?

Accepted Answer

The answer of Types of Audit Opinions
What are the five...

Question 9

Qualified opinions
Under what circumstances would an auditor issue a qualified opinion?

Accepted Answer

The answer of Qualified opinions
Under what circumstances would an auditor...

Question 10

Changes in reports
What is the difference between a reissued report and an updated report?

Accepted Answer

The answer of Changes in reports
What is the difference between...

Question 11

When performing attestation engagements in evolving areas such as Elder Care,a practitioner must
A)derive new and innovative standards of conduct.
B)pioneer the way for new profit centers that do not include written reports.
C)know the subject matter of the underlying assertions.
D)use criteria by which to measure unrelated assertions.

Accepted Answer

In order to perform an attestation engagement in an evolving area, such as Elder Care, a practitioner must have a thorough knowledge of the subject matter of the underlying assertions. This will enable them to understand the risks associated with the assertions and to design appropriate procedures to obtain sufficient evidence to support their conclusions. Options A and B are incorrect as they suggest that the practitioner should derive new standards or profit centers, which are not part of their role. Option D is also incorrect as unrelated assertions should not be measured as part of an attestation engagement.

Question 12

Which of the following would not require an unqualified audit report with an explanatory paragraph?
A)going concern.
B)scope limitation.
C)emphasis of a matter.
D)consistency in application of GAAP.

Accepted Answer

The answer of Which of the following would not require...

Question 13

Review reports
For a review report,identify:
 A. for whom the report may be performed: 
B. the procedures the audlitor must take;
C.  the type of assurance given; 
D. and auditor independence.

Accepted Answer

The answer of Review reports
For a review report,identify:
 A. for...

Question 14

Compilation reports and disclosures
You have been engaged to perform a compilation service for Raven Company.Management informs you that it will not include the required disclosures in the financial statements.What effect will this have on you with respect to this engagement?

Accepted Answer

The answer of Compilation reports and disclosures
You have been engaged...

Question 15

The scope paragraph of an unqualified opinion mostly gives information relating to
A)division of responsibilities.
B)the final assessment of a company's standings with the audit firm.
C)the statements and dates under audit.
D)audit planning and procedure.

Accepted Answer

The scope paragraph of an unqualified opinion describes the nature of the audit, including the audit planning and procedures followed, to provide assurance that the financial statements are free of material misstatement.

Question 16

Review engagements on the quarterly financial information of public companies must be performed in accordance with
A)Statements on Standards for Accounting and Review Services.
B)Standards of the Public Company Accounting Oversight Board.
C)Statements on Reviews for Public Registrants and Securities Acts.
D)Standards set by the Public Oversight Board of the Enforcement Division of the SEC.

Accepted Answer

Review engagements on the quarterly financial information of public companies must be performed in accordance with the Standards of the Public Company Accounting Oversight Board (PCAOB).

Question 17

Unqualified reports
Under what circumstances would an auditor issue an unqualified opinion modified by an explanatory paragraph? Would the paragraph go before or after the opinion paragraph?

Accepted Answer

The answer of Unqualified reports
Under what circumstances would an auditor...

Question 18

Audits of OCBOA financial statements are subject to
A)general standards only.
B)general standards and standards of fieldwork only.
C)general standards,standards of fieldwork,and reporting standards.
D)none of the audit standards.

Accepted Answer

OCBOA financial statements are subject to general standards, standards of fieldwork, and reporting standards as laid down by the American Institute of Certified Public Accountants (AICPA). These standards require the auditor to plan the audit, obtain sufficient and appropriate evidence, and express an opinion on the financial statements. Therefore, auditors cannot ignore any of these standards while conducting an audit of OCBOA financial statements.

Question 19

Which one of the following is not a special report issued as a result of an examination?
A)Report on a specified financial statement element.
B)Report on compliance with contractual agreements.
C)Report on agreed upon procedures.
D)Report on information presented in prescribed forms.

Accepted Answer

Agreed-upon procedures result in a report that is not an examination report, as it does not provide an opinion or assurance but rather presents findings based on specific procedures agreed upon by the parties involved.

Question 20

Which of the following services provides limited assurance?
A)Review.
B)Audit.
C)Examination.
D)Compilation.

Accepted Answer

A review provides limited assurance, as it provides a lower level of assurance than an audit or examination. A review consists primarily of inquiries, analytical procedures, and discussions with management, while an audit or examination involves more extensive procedures to obtain a higher level of assurance. A compilation, on the other hand, provides no assurance at all.

Quiz 16: Auditors Reports

Non-attestation reporting For a compilation report,identify: A. far whom the ragat mey be perfarmed; B. the pareduras the euditar muntaler; C. type of answere provided; D. and requirements regar ding auclitor inclependence

Leon Frank,CPA performs an audit of RedHen,Inc. ,which keeps its financial statements on the tax basis of accounting.Leon is aware of this fact and audits the financial statements on the criteria of the tax basis.This type of an engagement

A review of financial statements requires more knowledge and evidence than

The use of another CPA firm by an audit firm to perform part of the engagement on a client's subsidiary will require the audit firm to

Adverse opinions Under what circumstances would an auditor issue an adverse opinion?

A compilation report provides the user with which one of the following types of assurance?

When the auditor considers information that comes to his or her attention during the current year audit,but is related to prior year statements presented for comparative purposes,the report on the prior year is referred to as

Types of Audit Opinions What are the five basic types of financial statement audit reports?

Qualified opinions Under what circumstances would an auditor issue a qualified opinion?

Changes in reports What is the difference between a reissued report and an updated report?

When performing attestation engagements in evolving areas such as Elder Care,a practitioner must

Which of the following would not require an unqualified audit report with an explanatory paragraph?

Review reports For a review report,identify: A. for whom the report may be performed: B. the procedures the audlitor must take; C. the type of assurance given; D. and auditor independence.

Compilation reports and disclosures You have been engaged to perform a compilation service for Raven Company.Management informs you that it will not include the required disclosures in the financial statements.What effect will this have on you with respect to this engagement?

The scope paragraph of an unqualified opinion mostly gives information relating to

Review engagements on the quarterly financial information of public companies must be performed in accordance with

Unqualified reports Under what circumstances would an auditor issue an unqualified opinion modified by an explanatory paragraph? Would the paragraph go before or after the opinion paragraph?

Audits of OCBOA financial statements are subject to

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

Which of the following services provides limited assurance?