Which of the following would be considered an assurance engagement?
a. Giving an opinion on a prize promoter's claims about the amount of sweepstakes prizes awarded in the past.
b. Giving an opinion on the conformity of the financial statements of a university with generally accepted accounting...
Which of the following would be considered an assurance engagement?
a. Giving an opinion on a prize promoter's claims about the amount of
sweepstakes prizes awarded in the past.
b. Giving an opinion on the conformity of the financial statements of a university
with generally accepted accounting principles.
c. Giving an opinion on the fair presentation of a newspaper's circulation data.
d. Giving assurance about the average drive length achieved by golfers with a
client's golf balls
e. All of the choices are correct. - ANSWER- e. All of the choices are correct.
In an attestation engagement, a CPA practitioner is engaged to:
a. Compile a company's financial forecast based on management's assumptions
without expressing any form of assurance.
b. Prepare a written report containing a conclusion about the reliability of a
management assertion.
c. Prepare a tax return using information the CPA has not audited or reviewed.
d. Give expert testimony in court on particular facts in a corporate income tax
controversy. - ANSWER- b. Prepare a written report containing a conclusion
about the reliability of a management assertion.
According to the AICPA, the purpose of an audit of financial statements is to:
a. Enhance the degree of confidence that intended users can place in the
financial statements.
b. Express an opinion on the fairness with which they present financial position,
results of operations, and cash flows in conformity with accounting standards
promulgated by the Financial Accounting Standards Board.
c. Express an opinion on the fairness with which they present financial position,
results of operations, and cash flows in conformity with accounting standards
promulgated by the U.S. Securities and Exchange Commission.
, d. Obtain systematic and objective evidence about financial assertions and report
the results to interested users. - ANSWER- a. Enhance the degree of confidence
that intended users can place in the financial statements.
It is always a good idea for auditors to begin an audit with the professional
skepticism characterized by the assumption that:
a. A potential conflict of interest always exists between the auditor and the
management of the enterprise under audit.
b. In audits of financial statements, the auditor acts exclusively in the capacity of
an auditor.
c. The professional status of the independent auditor imposes commensurate
professional obligations.
d. Financial statements and financial data are verifiable. - ANSWER- a. A potential
conflict of interest always exists between the auditor and the management of the
enterprise under audit.
The objective in an auditor's review of credit ratings of a client's customers is to
obtain evidence related to management's assertion about:
a. Completeness.
b. Existence.
c. Valuation and allocation.
d. Rights and obligations.
e. Occurrence. - ANSWER- c. Valuation and allocation.
When auditing merchandise inventory at year-end, the auditor performs audit
procedures to ensure that all goods purchased before year-end are received
before the physical inventory count. This audit procedure provides assurance
about which management assertion?
a. Cutoff.
b. Existence.
c. Valuation and allocation.
d. Rights and obligations.
e. Occurrence. - ANSWER- a. Cutoff.
A review service engagement involving unaudited financial statements involves
a. Less work than a compilation but more work than an audit.
b. More work than a compilation and an audit.
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