Integrated Audits & Attestation Engagements
Help Questions
CPA Auditing and Attestation (AUD) › Integrated Audits & Attestation Engagements
Of the followin SSARS engagements, which requires limited assurance rather than no assurance?
Preparation
Compilation
Review
All require limited assurance
Explanation
Of the options, preparation and compilation require no assurance whereas review engagements require limited assurance.
One of the general conditions for SSARS engagements contains the phrase “presumptively mandatory requirements”. Under this definition:
Auditors must comply with requirements
Auditors must comply except where it is not cost efficient to do so
Noncompliance is allowed it the procedure is deemed ineffective
Auditor judgement prevails
Explanation
The concept of presumptive mandatory requirements assumes that in the absence of persuasive evidence, the auditor must comply with the pronouncement.
As a pre-condition to an agreed-upon procedure engagement.
The auditor is not required to be independent
The auditor is required to be independent
The auditor may agree upon the conclusions of the report with management
The auditor may agree upon the conclusion of the report with regulators
Explanation
As described in section AT 201, a practitioner may accept an agreed-upon procedure engagement “that the practitioner is independent”.
As a pre-condition to an agreed-upon procedure engagement.
The auditor is not required to be independent
The auditor is required to be independent
The auditor may agree upon the conclusions of the report with management
The auditor may agree upon the conclusion of the report with regulators
Explanation
As described in section AT 201, a practitioner may accept an agreed-upon procedure engagement “that the practitioner is independent”.
Of the followin SSARS engagements, which requires limited assurance rather than no assurance?
Preparation
Compilation
Review
All require limited assurance
Explanation
Of the options, preparation and compilation require no assurance whereas review engagements require limited assurance.
One of the general conditions for SSARS engagements contains the phrase “presumptively mandatory requirements”. Under this definition:
Auditors must comply with requirements
Auditors must comply except where it is not cost efficient to do so
Noncompliance is allowed it the procedure is deemed ineffective
Auditor judgement prevails
Explanation
The concept of presumptive mandatory requirements assumes that in the absence of persuasive evidence, the auditor must comply with the pronouncement.
Of the following, which would not be considered an attest engagement subject to attestation standards?
An engagement to review the financial statements of a nonpublic company
An engagement to review pro forma financial statements
An engagement to examine a financial forecast
An engagement to examine management's assertion about a subject matter
Explanation
Attest engagements covered under SSAE exclude services performed in accordance with SSARS. Since the review of a nonpublic company's financial statements is conducted under SSARS, it is not subject to attestation standards.
Of the following, which would not be considered an attest engagement subject to attestation standards?
An engagement to review the financial statements of a nonpublic company
An engagement to review pro forma financial statements
An engagement to examine a financial forecast
An engagement to examine management's assertion about a subject matter
Explanation
Attest engagements covered under SSAE exclude services performed in accordance with SSARS. Since the review of a nonpublic company's financial statements is conducted under SSARS, it is not subject to attestation standards.
Attestation risk is comprised of all of the following risks except for:
Inherent risk
Control risk
Detection risk
Financial risk
Explanation
Inherent, control, and detection risks are all components of attestation risk whereas financial risk is not a risk-focused on.
Jim Jones, CPA has been engaged by management to assist them in the preparation of financial statements. This engagement qualifies as a:
Audit
Review
Compilation
Attestation
Explanation
A compilation engagement is one in which the accounting firm assists management with the preparation of its financial statements.