What is meant by the term level of assurance? How does the level of assurance differ for an audit of historical financial statements, a review, and a
What is negative assurance? Why is it used in a review engagement report?
Distinguish between compilation and review of financial statements. What is the level of assurance for each?
Distinguish the three forms of compilation reports that a CPA can provide to clients.
List five things that are required of an auditor by SSARS for a compilation.
What steps should auditors take if during a compilation engagement they become aware that the financial statements are misleading?
What procedures should the auditor use to obtain the information necessary to give the level of assurance required of reviews of financial statements?
What should auditors do if during a review of financial statements they discover that applicable accounting standards are not being followed?
What are the differences between the review reports for a private company under SSARS and for the interim financial statements of a public company?
Explain why a review of interim financial statements for a public company may provide a greater level of assurance than an SSARS review.
Define what is meant by attestation standards. Distinguish between attestation standards and auditing standards.
List the five Trust Services principles and explain whether a WebTrust licensed CPA can report on an entity's compliance with those principles
Describe the purpose of a SysTrust assurance services engagement.
An audit client has engaged a third party service organization to host its payroll software package on servers located at the service organization.
Explain what is meant by prospective financial statements and distinguish between forecasts and projections. What four things are involved in an
State the reporting requirements for statements prepared on a basis other than GAAP.
The Absco Corporation has requested that Herb Germany, CPA, provide a report to the Northern State Bank as to the existence or nonexistence of
Multiple Choice QuestionsThe following are miscellaneous questions about compilation and review services. Choose the best response.a. It is
Multiple Choice QuestionsThe following questions concern attestation engagements.Choose the best response.a. Which of the following professional
Multiple Choice QuestionsThe following questions concern reports issued by auditors, other than those on historical financial statements. Choose the
Evaluate the following comments about compiled financial statements: "When CPAs associate their name with compiled financial statements, their only
You are doing a review services and related tax work engagement for Murphy Construction Company. You have made extensive inquiries of management
SSARS contain several procedures that are required when engaged to perform a compilation or review engagement. Below are ten statements that may or
In an engagement to review the financial statements of a nonpublic company, SSARS require the accountant to obtain review evidence that is primarily
Lucia Johnson, of Johnson and Lecy, CPAs, has completed the first-year audit of Tidwell Publishing Co., a publicly held company, for the year ended
Each of the following represents different client requests for engagements related to WebTrust and SysTrust assurance services.a. Ware Hospital
Carl Monson, the owner of Major Products Manufacturing Company, a small, successful, longtime audit client of your firm, has requested you to work
You have been requested by the management of J. L. Lockwood Co. to issue a debt compliance letter as a part of the audit of Taylor Fruit Farms, Inc.
Bengston, CPA, is conducting the audit of Pollution Control Devices, Inc. In addition, a supplemental negative assurance report is required to a
Jones, CPA, has completed the audit of Sarack Lumber Supply Co. and has issued a standard unqualified report. In addition to a report on the overall
The Accounting and Review Services Committee (ARSC) is responsible for issuing standards for compilations and reviews of financial statement issued
Explain the role of internal auditors for financial auditing. How is it similar to and different from the role of external auditors?
What is the nature of the two categories of standards in the IIA International Standards for the Professional Practice of Auditing?
Explain the difference between the independence of internal auditors and external auditors in the audit of historical financial statements. How can
Explain how governmental financial auditing is similar to and different from audits of commercial companies. Who does governmental auditing?
Explain what is meant by the Single Audit Act. What is its purpose?
In what ways is the Yellow Book consistent with generally accepted auditing standards, and what are some additions and modifications?
Identify the primary specific objectives that must be incorporated into the design of audit tests under the Single Audit Act.
Identify the key required reports of the Single Audit Act and OMB Circular A-133.
Describe what is meant by an operational audit.
Identify the three major differences between financial and operational auditing.
Distinguish between efficiency and effectiveness in operational audits. State one example of an operational audit explaining efficiency and another
Distinguish among the following types of operational audits: functional, organizational, and special assignment. State an example of each for a
Explain why many people think of internal auditors as the primary group responsible for conducting operational audits.
Explain the role of government auditors in operational auditing. How is this similar to and different from the role of internal auditors?
Under what circumstances are external auditors likely to be involved in operational auditing? Give one example of operational auditing by a CPA firm.
Explain what is meant by the criteria for evaluating efficiency and effectiveness. Provide five possible specific criteria for evaluating
Identify the three phases of an operational audit.
Explain how planning for operational auditing is similar to and different from financial auditing.
What are the major differences between reporting for operational and financial auditing?
Multiple Choice QuestionsThe following questions deal with independence of auditors. Choose the best response.a. The operational auditor's
Multiple Choice QuestionsThe following questions deal with governmental auditing. Choose the best response.a. A governmental audit may extend beyond
Multiple Choice QuestionsThe following questions deal with operational auditing.Choose the best response.a. Which of the following best describes the
Multiple Choice QuestionsThe following questions deal with internal auditing. Choose the best response.a. Which of the following is generally
Lajod Company has an internal audit department consisting of a manager and three staff auditors. The manager of internal audits, in turn, reports to
Weston Corporation has an internal audit department operating out of the corporate headquarters. Various types of audit assignments are performed by
Haskin Company was founded 40 years ago and now has several manufacturing plants in the Northeast and Midwest. The evaluation of proposed capital
Lecimore Company has a centralized purchasing department that is managed by Joan Jones. Jones has established policies and procedures to guide the
Superior Co. manufactures automobile parts for sale to the major U.S. automakers. Superior's internal audit staff is to review the internal controls
The Institute of Internal Auditors (IIA) is an international professional association of more than 170,000 members with global headquarters in
Explain the relationships among audit services, attestation services, and assurance services, and give examples of each.
Discuss the major factors in today's society that have made the need for independent audits much greater than it was 50 years ago.
Distinguish among the following three risks: risk-free interest rate, business risk, and information risk. Which one or ones does the auditor reduce
Identify the major causes of information risk and identify the three main ways information risk can be reduced. What are the advantages and
Explain what is meant by determining the degree of correspondence between information and established criteria. What are the information and
Describe the nature of the evidence the internal revenue agent will use in the audit of Jones Company's tax return.
In the conduct of audits of financial statements, it would be a serious breach of responsibility if the auditor did not thoroughly understand
What are the differences and similarities in audits of financial statements, compliance audits, and operational audits?
List five examples of specific operational audits that can be conducted by an internal auditor in a manufacturing company.
What knowledge does the auditor need about the client's business in an audit of historical financial statements? Explain how this knowledge may be
What are the major differences in the scope of the audit responsibilities for CPAs, GAO auditors, IRS agents, and internal auditors?
Identify the four parts of the Uniform CPA Examination.
Explain why CPAs need to be knowledgeable about information technology, including e-commerce technologies.
Multiple Choice QuestionsThe following questions deal with audits by CPA firms. Choose the best response.a. Which of the following best describes why
Multiple Choice QuestionsThe following questions deal with types of audits and auditors. Choose the best response.a. Operational audits generally
The list below indicates various audit, attestation, and assurance engagements involving auditors.1. A report on the effectiveness of internal
Busch Corporation has an existing loan in the amount of $4.5 million with an annual interest rate of 5.5%. The company provides an internal
Consumers Union is a nonprofit organization that provides information and counsel on consumer goods and services. A major part of its function is the
James Burrow is the loan officer for the National Bank of Dallas. National has a loan of $325,000 outstanding to Regional Delivery Service, a company
Five college seniors with majors in accounting are discussing alternative career plans. The first senior plans to become an internal revenue agent
In the normal course of performing their responsibilities, auditors often conduct audits or reviews of the following:1. Federal income tax returns of
Dave Czarnecki is the managing partner of Czarnecki and Hogan, a medium-sized local CPA firm located outside of Chicago. Over lunch, he is surprised
Individuals are licensed as CPAs by individual states. Information on the requirements for each state can be found on the National Association of
State the four major types of services CPAs perform, and explain each.
What major characteristics of the organization and conduct of CPA firms permit them to fulfill their social function competently and independently?
What is the role of the Public Company Accounting Oversight Board?
Describe the role of the SEC in society and discuss its relationship with and influence on the practice of auditing.
What roles are played by the American Institute of Certified Public Accountants for its members?
What are the purposes of the AICPA Statements on Standards for Attestation Engagements?
Who is responsible for establishing auditing standards for audits of U.S. public companies? Who is responsible for establishing auditing standards
Distinguish between generally accepted auditing standards and generally accepted accounting principles, and give two examples of each.
The first standard of field work requires the performance of the audit by a person or persons having adequate technical training and proficiency as
Generally accepted auditing standards have been criticized by different sources for failing to provide useful guidelines for conducting an audit. The
Describe the role of International Standards on Auditing. What is the relationship between International Standards on Auditing and U.S. Generally
What is meant by the term quality control as it relates to a CPA firm?
The following is an example of a CPA firm's quality control procedure requirement: "Any person being considered for employment by the firm must have
State what is meant by the term peer review. What are the implications of peer review for the profession?
What are the two AICPA resource centers to which CPA firms may belong? What are the primary purposes of the two centers?
Multiple Choice QuestionsThe following questions deal with auditing standards. Choose the best response.a. International Standards on Auditing are
Multiple Choice QuestionsThe following questions concern quality control standards. Choose the best response.a. A CPA firm is reasonably assured of
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