CPA Auditing and Attestation (AUD) : Types of Engagements - SSARS

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Example Questions

Example Question #1 : Integrated Audits & Attestation Engagements

One of the general conditions for SSARS engagements contains the phrase “presumptively mandatory requirements”. Under this definition:

Possible Answers:

Noncompliance is allowed it the procedure is deemed ineffective

Auditors must comply with requirements

Auditors must comply except where it is not cost efficient to do so

Auditor judgement prevails

Correct answer:

Auditors must comply with requirements

Explanation:

The concept of presumptive mandatory requirements assumes that in the absence of persuasive evidence, the auditor must comply with the pronouncement.

Example Question #2 : Types Of Engagements Ssars

Auditors should not accept and engagement under SSARS if they question:

Possible Answers:

All of the answer choices are correct

Managements integrity

Information needed may not be available

Independence requirements will not be satisfied

Correct answer:

All of the answer choices are correct

Explanation:

Under SSARS guidance an auditor should not accept an engagement if they are concerned about management integrity or the availability of information.  An engagement should also not be accepted if independence requirements are impaired.

Example Question #3 : Types Of Engagements Ssars

Jim Jones, CPA has been engaged by management to assist them in the preparation of financial statements. This engagement qualifies as a:

Possible Answers:

Audit

Review

Attestation

Compilation

Correct answer:

Compilation

Explanation:

A compilation engagement is one in which the accounting firm assists management with the preparation of its financial statements.

Example Question #3 : Types Of Engagements Ssars

A CPA auditor has determined that a client which had received a federal grant, fraudulently reported information to the federal government. Management of the client refuses to recognize the fraud. Of the following parties, which should the auditor contact first?

Possible Answers:

The agency that provided the grant

The state attorney general's office

The state board of accountancy

The recipiencts of the client services

Correct answer:

The agency that provided the grant

Explanation:

First, the auditor should attempt to reach the agency that provided the grant in reporting the fraud. The others listed are not required to contact.

Example Question #5 : Types Of Engagements Ssars

GAS require a written report on internal control:

Possible Answers:

In every audit

Only when there are reportable conditions

Only when there are reportable conditions that are significant enough to be material weaknesses

Either orally or in writing

Correct answer:

In every audit

Explanation:

GAS requires a written report on every audit of internal control.

Example Question #6 : Types Of Engagements Ssars

Of the followin SSARS engagements, which requires limited assurance rather than no assurance?

Possible Answers:

Compilation

Review

All require limited assurance

Preparation

Correct answer:

Review

Explanation:

Of the options, preparation and compilation require no assurance whereas review engagements require limited assurance.

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