CPA Auditing and Attestation (AUD) : Preparation vs Compilation vs Review Engagements
Study concepts, example questions & explanations for CPA Auditing and Attestation (AUD)
All CPA Auditing and Attestation (AUD) Resources
Example Questions
Example Question #1 : Preparation Vs Compilation Vs Review Engagements
The Compilation audit report will:
State that the Financial Statements are the responsibility of management
Discuss internal control findings
Express an opinion based on GAAP
Discuss auditing procedures
State that the Financial Statements are the responsibility of management
Although the firm may assist management in the preparation of statements, the compilation audit report will state that the report is the responsibility of management.
Example Question #2 : Cpa Auditing And Attestation (Aud)
A review engagement provides what level of assurance regarding the applicable financial framework
absolute assurance
limited assurance
sufficient assurance
minimal assurance
limited assurance
A review engagement provides limited assurance. Limited assurance is given that the financial statements comply with the applicable reporting framework.
Example Question #3 : Cpa Auditing And Attestation (Aud)
A review engagement should express which of the following terms:
Auditors Responsibilities
Managements objectives
Managements responsibilities
All of the answer choices are correct
All of the answer choices are correct
AR Section 90; review of financial statements. Section .04 states that the engagement determines: management responsibility, the auditor’s responsibility, and management objectives.
Example Question #2 : Preparation Vs Compilation Vs Review Engagements
Regarding the review of financial statements of a non-issuer performed in accordance with SSARS, the CPA is required to obtain:
A client representation letter
A letter of consent from the prior auditor
An understanding of internal control
Sufficient evidence supporting management's assertions
A client representation letter
The CPA is required to obtain a representation letter from management for all financial statements and periods covered by the review report.
Example Question #3 : Preparation Vs Compilation Vs Review Engagements
Of the following statements, which is correct regarding a review of a nonpublic entity financial statements in accordance with SSARS?
An opinion is expressed in the review report
The CPA is required to assess the risk of fraud
The CPA must be independent to issue the review report
It is not necessary for the CPA to obtain a management representation letter
The CPA must be independent to issue the review report
In order to issue a review report on the financial statements of a nonpublic entity, the accountant must be independent.
Example Question #1 : Preparation Vs Compilation Vs Review Engagements
When a preparer conducts a preparation engagement, the accountant should:
Perform a compilation engagement if he or she is unable to include a statement on each page of the financial statements
Both
Neither
Issue a disclaimer of opinion if he or she is unable to include a statement on each page of the financial statements
Both
With a preparation requirement, the preparer must include a statement on each page of the financials. If he or she cannot, these two options are the only options.
Certified Tutor
Certified Tutor
All CPA Auditing and Attestation (AUD) Resources
