Chapter 21 – Assurance, Attestation, and Internal Auditing Services
46. Independence is required
47. Blue Co., a privately-held entity, asked its tax accountant, Cook, a CPA in public practice,
to reproduce Blue’s internally-prepared interim financial statements on Cook’s computer when
Cook prepared Blue’s quarterly tax return. Cook should not submit these financial statements to
Blue unless, at a minimum, Cook complies with the provisions of
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
48. Snow, CPA, was engaged by Master Co., a privately-held company, to examine and report
on management’s written assertion about the effectiveness of Master’s internal control over
financial reporting. Snow’s report should state that
49. An accountant may accept an engagement to apply agreed-upon procedures to prospective
financial statements provided that
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
50. Accepting an engagement to compile a financial projection for a public company most
likely would be inappropriate if the projection were to be distributed to
51. When third party use of prospective financial statements is expected, an accountant may not
accept an engagement to
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
52. The party responsible for assumptions identified in the preparation of prospective financial
statements is usually
53. An accountant’s compilation report on a financial forecast should include a statement that
the
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
54. Responding to a question such as “What would happen if” is an attribute of which of the
following types of engagements?
55. When an accountant is not independent of a client and is requested to perform a compilation
of the client’s financial statements, the accountant
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
56. Before performing a compilation of the financial statements of a nonpublic entity, an
accountant should
57. During a review of financial statements of a nonpublic entity, the CPA would be least likely
to
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
58. Which of the following should be included in an accountant’s standard report based upon
the review of a nonpublic entity’s financial statements?
59. Which of the following procedures is usually included in a review engagement of a
nonpublic entity?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
60. Inquiry and analytical procedures ordinarily performed during a review of a nonpublic
entity’s financial statements include
61. During a review of the financial statements of a nonpublic entity, an accountant becomes
aware of inadequate disclosure that is material to the financial statements. If management
refuses to correct the financial statement presentations, the accountant should
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
62. Statements on Standards for Accounting and Review Services establish standards and
procedures for which of the following engagements?
63. IIA Standards include
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
64. An accountant is required to comply with the provisions of Statements on Standards for
Accounting and Review Services when
I. Typing client-prepared financial statements, without modification, as an accommodation to a
client.
II. Preparing standard monthly journal entries for depreciation and expiration of prepaid
expenses.
65. A compilation of prospective financial statements involves all of the following except:
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
66. In a review engagement, the accountant must make all of the following inquiries except
those to:
67. Which of the following procedures is not usually performed by the accountant during a
review engagement of a nonpublic entity?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
68. The expectation that an internal auditor does not accept gifts that may impair judgment is
based on the principle of
69. Which of the following is not an aspect of the assurances provided by a CPA WebTrust
report?
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
70. In providing PrimePlus services, a CPA is likely to perform all of the following functions
except:
71. Direct services offered under PrimePlus include all of the following except:
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
72. The type of report issued under a PrimePlus assurance engagement is likely which of the
following?
73. Trust Service principles cover
Chapter 21 – Assurance, Attestation, and Internal Auditing Services
74. An attestation report should state that the use of the report is restricted to specified parties
under all of the following circumstances except when:
75. Which of the following is not an attestation standard?