Chapter 21 – Assurance, Attestation, and Internal Auditing Services
1. Assurance services are independent professional services that improve the quality of
information specifically for internal decision makers.
2. Electronic commerce is an example of a category of assurance services.
3. An attest service occurs when a practitioner is engaged to issue a report on subject matter that
is the responsibility of another party.
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
4. Examples of attest engagements include examination, review, and agreed-upon procedures
engagements.
5. Limited assurance is provided in a review engagement.
6. Independence is one of the general standards for attestation engagements.
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
7. The two standards of fieldwork for attestation engagements do not include the requirement
that the CPA gain an understanding of internal control.
8. Management and the external auditor are responsible for the effectiveness of the entity’s
internal control.
9. A practitioner is allowed to perform either of two types of attestation engagements for
reporting on internal control: (1) examination or (2) review.
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
10. Attestation standards provide guidance for performing assurance services with respect to
several types of engagements, including prospective financial statements.
11. The public has turned to CPAs to provide assurance services primarily because
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
12. Which of the following is the authoritative body designated to promulgate attestation
standards for nonpublic entities?
13. In performing an attestation engagement, a CPA typically
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
14. Which of the following is a conceptual difference between the attestation standards and
generally accepted auditing standards?
15. Which of the following conditions is necessary for a practitioner to accept an attest
engagement to examine and report on an entity’s internal control over financial reporting?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
16. An accountant’s report expressing an opinion on an entity’s internal controls should state
that
17. For a practitioner to examine management’s assertions about the effectiveness of internal
controls, all of the following conditions are necessary except:
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
18. Prospective financial statements may be prepared for
19. Given one or more hypothetical assumptions, a responsible party may prepare, to the best of
his knowledge and belief, an entity’s expected financial position, results of operations, and
changes in cash flows. Such prospective financial statements are known as
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
20. Which of the following are prospective financial statements upon which an accountant may
appropriately report for general use?
21. Accepting an engagement to examine an entity’s financial projections would most likely be
appropriate if distribution of the projections were limited to
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
22. An examination of a financial forecast is a professional service that involves
23. An accountant’s standard report on a compilation of a projection should not include
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
24. Limited assurance is provided in
25. Absolute assurance is provided in
26. Reasonable assurance is provided in
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
27. Which of the following should not be included in an accountant’s standard report based
upon the compilation of an entity’s financial statements?
28. Before issuing a report on the compilation of financial statements of a nonpublic entity, the
accountant should
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
29. During a review of the financial statements of a nonpublic entity, the CPA finds that the
financial statements contain a material departure from generally accepted accounting principles.
If management refuses to correct the problem, the CPA should
30. Which of the following procedures is not included in a review engagement of a nonpublic
entity?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
31. Inquiry of the entity’s personnel and analytical procedures are the primary bases for the
issuance of a(n)
32. The report of a CPA on a review of the financial statements of a nonpublic entity should not
include a statement that
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
33. Prior to commencing the compilation of financial statements of a nonpublic entity, the
accountant should
34. Compilation reports may include
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
35. In an examination of prospective financial statements, which of the following would not
require a departure from the standard examination report?
36. May an accountant plan and perform an engagement to compile or review the financial
statements of a not-for-profit entity if the accountant is unfamiliar with the specialized industry
accounting principles?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
37. The report in a review engagement provides
38. Compilations provide which of the following types of assurance about the fair presentation
of financial statements?
39. Which of the following is not a main goal of the internal auditing profession?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
21–18
40. The International Professional Practices Framework developed by the IIA includes all of
the following types of guidance, except:
41. Which of the following statements best describes the guidance developed by the AICPA
related to WebTrust services?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
42. Which of the following statements is true regarding the performance of an assurance service
on information systems reliability by a CPA?
43. Which of the following statements is not true concerning assurance services?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
44. An entity engaged a CPA to determine whether the client’s websites meet defined criteria
for standard business practices and controls over transaction integrity and information
protection. In performing this engagement, the CPA should comply with the provisions of
45. Which of the following would be considered a part of a consulting services (non-assurance)
engagement?
I. Expressing a conclusion about the reliability of a client’s financial statements.
II. Reviewing and commenting on a client-prepared business plan.