CPA Auditing and Attestation (AUD) : CPA Auditing and Attestation (AUD)
Study concepts, example questions & explanations for CPA Auditing and Attestation (AUD)
All CPA Auditing and Attestation (AUD) Resources
Example Questions
Example Question #1 : Types Of Engagements Agreed Upon Procedures
Procedures performed under an attestation engagement
Comply with government regulations
Meet the intended purpose of the engagement
Comply with GAAP
Comply with SEC Regulations
Meet the intended purpose of the engagement
In order to comply with terms of engagement under an attestation, the engagement should meet the intended purpose of the engagement.
Example Question #1 : Types Of Engagements Agreed Upon Procedures
Anderson CPA’s entered into an Agreed upon Procedure engagement with Delany Inc. Management of Delany discussed the terms of the engagement with auditors but refused to put the terms in writing. Anderson should:
Withdraw from the engagement
Do not perform the agreed-upon terms unless they secure payment
Perform the terms as to their oral agreement
Alert regulatory authorities of the departure
Withdraw from the engagement
SSAE 18 requires that the terms of the engagement be in writing. Because management is refusing to express the terms in writing the firm should not accept the engagement and withdraw.
Example Question #2 : Types Of Engagements Agreed Upon Procedures
The agreed-upon procedure report should:
Indicate the auditor is independent
Include the identification of the engaging party
All of the answer choices are correct
Include an appropriate address
All of the answer choices are correct
All of the elements are included in the terms of the engagement. The engagement must express auditor independence, identify and address and include the identification of the engaging party.
Example Question #3 : Types Of Engagements Agreed Upon Procedures
Accepting an engagement to examine an entity's financial projection most likely would be appropriate if the projection were to be distributed to:
A bank with which the entity is negotiating for a loan
Potential shareholders who request a prospectus or a registration statement
All shareholders of record as of the report date
All employees who work for the entity
A bank with which the entity is negotiating for a loan
Financial projections are hypothetical prospective financial statements. Because the user may need to ask the responsible party questions about the underlying assumptions, financial projections are restricted use reports, whose use is restricted to the responsible party and those third parties with whom the responsible party is negotiating directly.
Example Question #4 : Types Of Engagements Agreed Upon Procedures
An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that:
Use of the report is restricted to the specified parties
The prospective financial statements are also examined
Responsibility for the adequacy of the procedures performed is taken by the accountant
Negative assurance is expressed on the prospective financial statements taken as a whole
Use of the report is restricted to the specified parties
An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that certain conditions are met, including that the use of the report is restricted to the specified parties.
Example Question #6 : Types Of Engagements Agreed Upon Procedures
Agreed-upon procedures can be performed as long as the following conditions are present:
Sufficient procedures
Party agreement
All of the answer choices are correct
Practitioner independence
All of the answer choices are correct
All of these factors must be present for an agreed-upon procedure engagement to be conducted.
Example Question #5 : Compliance, & Government Audits
An integrated audit
Both A and B
Is not required by privately held companies
Is only required by large public companies
Neither A and B
Both A and B
An integrated audit is not required by private corporations. The integrated audit is performed under PCAOB standards that govern public companies.
Example Question #6 : Compliance, & Government Audits
Integrated audits are regulated by the:
AICPA
IFRS
PCAOB
ASB
PCAOB
Integrated audits are regulated under PCAOB standard number 5.
Example Question #91 : Cpa Auditing And Attestation (Aud)
As described by PCAOB auditing standard number 2, an effective internal control
Is not effective if there is any material weakness
Is designed to uncover fraud
Is not effective if there are more than two immaterial weaknesses
Will disclose all internal control weaknesses
Is not effective if there is any material weakness
According to PCAOB Accounting Standards: “Maintaining effective internal control over financial reporting means that no material weaknesses exist; therefore, the objective of the audit of internal control over financial reporting is to obtain reasonable assurance that no material weaknesses exist as of the date specified in management's assessment.”
Example Question #92 : Cpa Auditing And Attestation (Aud)
Of the following, which is true regarding PCAOB standards surrounding internal control?
The PCAOB has not issued standards surrounding internal control
PCAOB standards surrounding internal control apply only to audits of issuers
PCAOB standards surrounding internal control apply only to audit of nonissuers
All auditors must follow PCAOB standards surrounding internal control
PCAOB standards surrounding internal control apply only to audits of issuers
PCAOB standards surrounding internal control apply only to audits of issuers.
All CPA Auditing and Attestation (AUD) Resources
