Question 1

A financial forecast is based on one or more hypothetical courses of action.

Accepted Answer

The answer of A financial forecast is based on one...

Question 2

Under the balanced scorecard approach an entity develops goals and performance measures in each of three areas.

Accepted Answer

The balanced scorecard approach involves developing goals and performance measures in four areas: financial, customer, internal business processes, and learning and growth.

Question 3

CPA Performance View is a system that merges the standard financial measures with leading indicators.

Accepted Answer

CPA Performance View is a framework that integrates traditional financial metrics with forward-looking indicators to provide a comprehensive view of an organization's performance.

Question 4

In the balanced scorecard approach to performance measurement, the goal of product quality relates to the: A) innovation perspective. B) financial perspective. C) managerial perspective. D) internal perspective. E) customer perspective.

Accepted Answer

Product quality relates to the customer perspective because it measures how well the company's products or services meet the needs of its customers.

Question 5

The auditor's special report on financial statements prepared on an OCBOA should contain all of the following except:
A) an introductory paragraph.
B) a scope paragraph.
C) an exclusion paragraph.
D) an explanatory paragraph.
E) an opinion paragraph.

Accepted Answer

An exclusion paragraph is not a standard component of an auditor's special report on financial statements prepared on a basis of accounting other than generally accepted accounting principles (OCBOA). The report typically includes an introductory paragraph, a scope paragraph, an explanatory paragraph (if necessary), and an opinion paragraph.

Question 6

The SSARS review service was originally developed as a lower-cost and lower-assurance alternative to an audit of the financial statements of public entities.

Accepted Answer

The SSARS (Statements on Standards for Accounting and Review Services) review service was developed primarily for private entities, not public entities, as a lower-cost and lower-assurance alternative to an audit.

Question 7

The basic levels of assurance are as follows except:
A) audit or examination-level assurance.
B) complete assurance.
C) review-level assurance.
D) agreed-upon assurance.
E) no assurance.

Accepted Answer

Complete assurance is not a recognized level of assurance in the context of audits or financial reviews. Assurance services typically include audit or examination-level assurance, review-level assurance, agreed-upon procedures assurance, and situations where no assurance is provided. Complete assurance is not feasible because auditors cannot guarantee that all material misstatements will be detected due to the inherent limitations of an audit.

Question 8

Which one of the following is not identified as an Attest Service?
A) Management's assertion about internal control.
B) Agreed-upon procedure engagements.
C) A forecast.
D) A compilation of financial statements.
E) SysTrust.

Accepted Answer

A compilation of financial statements is not considered an attest service because the accountant is not required to verify the accuracy or completeness of the information provided by the client or otherwise gather evidence for the purpose of expressing an opinion or conclusion. In contrast, attest services typically involve the CPA expressing an opinion or conclusion about a subject matter or an assertion based on the evaluation of evidence.

Question 9

Whether the system is protected against unauthorized physical and logical access defines:
A) system security.
B) system availability.
C) system integrity.
D) system verifiability.
E) system maintainability.

Accepted Answer

System security is concerned with protecting the system against unauthorized access, both physical and logical, ensuring that only authorized users can access the system and its data.

Question 10

The CPA should consider attestation risk the same way he or she would consider audit risk.

Accepted Answer

Attestation risk and audit risk both involve the risk that the practitioner may unknowingly fail to appropriately modify their report on information that is materially misstated.

Question 11

Whether the entity maintains effective controls to provide reasonable assurance that customers' transactions using e-commerce are completed and billed as agreed defines:
A) transaction integrity.
B) information protection.
C) risk assessment.
D) performance measurement.
E) ElderCare services.

Accepted Answer

Transaction integrity refers to the assurance that transactions are conducted and processed accurately, securely, and as intended, which includes ensuring that e-commerce transactions with customers are completed and billed as agreed.

Question 12

In performing an attest engagement, a CPA performs all of the following except:
A) relies on management statements.
B) gathers evidence to support the assertions.
C) objectively assesses the measurements of assertions.
D) objectively assesses the communications of the individual making the assertions.
E) reports the findings.

Accepted Answer

In an attest engagement, a CPA does not merely rely on management statements; instead, they gather evidence, assess the measurements and communications related to assertions objectively, and report their findings. Reliance on management statements without further evidence gathering and assessment would not fulfill the CPA's responsibility for due diligence and objectivity.

Question 13

Whether the entity maintains effective controls to provide reasonable assurance that private customer information obtained as a result of e-commerce is protected from uses not related to the entity's business defines:
A) transaction integrity.
B) information protection.
C) risk assessment.
D) performance measurement.
E) ElderCare services.

Accepted Answer

Information protection is concerned with ensuring that private customer information obtained through e-commerce is safeguarded against unauthorized uses, which is not related to the entity's core business activities. This involves implementing controls to protect the confidentiality and integrity of customer data.

Question 14

The purpose of a CPA Elder Care engagement is to assure family members that elderly relatives no longer able to be totally independent are receiving the type of care they need.

Accepted Answer

A CPA Elder Care engagement involves a CPA assessing and reporting on the well-being and financial situation of an elderly person, ensuring they are receiving appropriate care and their finances are properly managed, which provides assurance to family members.

Question 15

The compilation engagement is directed at assisting management in the preparation of financial information as well as providing assurance about whether the information is free of material misstatement.

Accepted Answer

A compilation engagement is aimed at assisting management in the preparation and presentation of financial information but does not provide any assurance on the accuracy or completeness of the information.

Question 16

In the balanced scorecard approach to performance measurement, the goal of manufacturing efficiency relates to the: A) innovation perspective. B) financial perspective. C) managerial perspective. D) internal perspective. E) customer perspective.

Accepted Answer

The goal of manufacturing efficiency relates to the internal perspective in the balanced scorecard approach, as this perspective focuses on internal operational goals and processes that are necessary to meet customer and financial objectives.

Question 17

All organizations have performance measurement systems.

Accepted Answer

Not all organizations have formal performance measurement systems in place. Some may operate without structured systems due to their size, resource constraints, or the nature of their operations.

Question 18

Whether the system processing is complete, accurate, timely, and authorized defines:
A) system security.
B) system availability.
C) system maintainability.
D) system verifiability.
E) system integrity.

Accepted Answer

System integrity refers to the assurance that data is real, accurate, and safeguarded from unauthorized user alterations. The characteristics of complete, accurate, timely, and authorized processing are directly related to ensuring the integrity of the system.

Question 19

The recommendations in a consulting engagement are measured against established criteria such as GAAP, OCBOA, or COSO standards on internal controls.

Accepted Answer

The answer of The recommendations in a consulting engagement are...

Question 20

In a consulting engagement independence is required.

Accepted Answer

Independence is not always required in consulting engagements, as these often involve providing advice and solutions rather than assurance services, where independence is crucial.

Quiz 20: Attest and Assurance Services, and Related Reports

A financial forecast is based on one or more hypothetical courses of action.

Under the balanced scorecard approach an entity develops goals and performance measures in each of three areas.

CPA Performance View is a system that merges the standard financial measures with leading indicators.

In the balanced scorecard approach to performance measurement, the goal of product quality relates to the:

The auditor's special report on financial statements prepared on an OCBOA should contain all of the following except:

The SSARS review service was originally developed as a lower-cost and lower-assurance alternative to an audit of the financial statements of public entities.

The basic levels of assurance are as follows except:

Which one of the following is not identified as an Attest Service?

Whether the system is protected against unauthorized physical and logical access defines:

The CPA should consider attestation risk the same way he or she would consider audit risk.

Whether the entity maintains effective controls to provide reasonable assurance that customers' transactions using e-commerce are completed and billed as agreed defines:

In performing an attest engagement, a CPA performs all of the following except:

Whether the entity maintains effective controls to provide reasonable assurance that private customer information obtained as a result of e-commerce is protected from uses not related to the entity's business defines:

The purpose of a CPA Elder Care engagement is to assure family members that elderly relatives no longer able to be totally independent are receiving the type of care they need.

The compilation engagement is directed at assisting management in the preparation of financial information as well as providing assurance about whether the information is free of material misstatement.

In the balanced scorecard approach to performance measurement, the goal of manufacturing efficiency relates to the:

All organizations have performance measurement systems.

Whether the system processing is complete, accurate, timely, and authorized defines:

The recommendations in a consulting engagement are measured against established criteria such as GAAP, OCBOA, or COSO standards on internal controls.

In a consulting engagement independence is required.