DeVry ACCT 591 Quiz 2 latest

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DeVry ACCT 591 Quiz 2 latest

Question 1.1. (TCO E) (CPA-06360.B) Which of the following statements is true regarding analytical procedures in a review engagement? (Points : 10)

Analytical procedures are not required to be used as a substantive test.

Analytical procedures do not involve comparisons of recorded amounts to expected amounts.

Analytical procedures are required to be used in the final review stage.

Analytical procedures involve the use of both financial and nonfinancial data.

Question 2.2. (TCO E) (CPA-05719.B) A CPA is engaged to examine an entity’s financial forecast. The CPA believes that several significant assumptions do not provide a reasonable basis for the forecast. Under these circumstances, the CPA should issue a(an): (Points : 10)

Adverse opinion.

Pro forma opinion.

Qualified opinion.

Unmodified opinion with an explanatory paragraph.

Question 3.3. (TCO E) ) (CPA-06290.B) If requested to perform a review engagement for a nonissuer in which an accountant has an immaterial direct financial interest, the accountant is: (Points : 10)

Not independent and, therefore, may not be associated with the financial statements.

Not independent and, therefore, may not issue a review report.

Not independent and, therefore, may issue a review report, but may not issue an auditor’s opinion.

Independent because the financial interest is immaterial and, therefore, may issue a review report.

Question 4.4. (TCO E) (CPA-03400.B) In which case would the accountant be least likely to perform a review of interim financial information under PCAOB standards? (Points : 10)

Quarterly reports are required to be filed with the SEC.

Selected quarterly financial data is included in an annual report.

Quarterly financial data is included in the financial statements of a nonissuer.

The accountant is performing an initial audit of financial statements that include selected quarterly data.

Question 5.5. (TCO E) (CPA-06328.B) Baker, CPA, was engaged to review the financial statements of Hall Company, a nonissuer. Evidence came to Baker’s attention that indicated substantial doubt as to Hall’s ability to continue as a going concern. The principal conditions and events that caused the substantial doubt have been fully disclosed in the notes to Hall’s financial statements. Which of the following statements best describes Baker’s reporting responsibility concerning this matter? (Points : 10)

Baker is not required to modify the accountant’s review report.

Baker is not permitted to modify the accountant’s review report.

Baker should issue an accountant’s compilation report instead of a review report.

Baker should express a qualified opinion in the accountant’s review report.

Question 6.6. (TCO E) (CPA-06724.B) Which of the following procedures should an accountant perform during an engagement to compile prospective financial statements? (Points : 10)

Test the entity’s internal controls to determine if adequate controls exist so that financial projections can be reasonably achieved.

Make inquiries prior to the date of the report about possible future transactions that may impact the forecast once the report is issued.

Make inquiries about the accounting principles used in the preparation of the prospective financial statements.

Compare the prospective financial statements with the entity’s historical results for the prior year.

Question 7.7. (TCO E) (CPA-06335.B) An accountant performing a compilation or review of the financial statements of a nonissuer should: (Points : 10)

Be able to justify departures from SSARS.

Never depart from SSARS guidelines.

Exercise professional judgment in applying SSARS, since they are considered recommendations as opposed to standards.

Not depart from Statements on Auditing Standards.

Question 8.8. (CPA-03417.B) The objective of a review of interim financial information of a public entity is to provide an accountant with a basis for reporting whether: (Points : 10)

A reasonable basis exists for expressing an updated opinion regarding the financial statements that were previously audited.

Material modifications should be made to conform with generally accepted accounting principles.

The financial statements are presented fairly in accordance with standards of interim reporting.

The financial statements are presented fairly in accordance with generally accepted accounting principles.

Question 9.9. (TCO E) (CPA-04741.B) Which of the following activities would most likely be considered an attestation engagement? (Points : 10)

Consulting with management representatives of a firm to provide advice.

Issuing a report about a firm’s compliance with laws and regulations.

Advocating a client’s position on tax matters that are being reviewed by the IRS.

Preparing a client’s tax returns.

Question 10.10. (TCO E) (CPA-06301.B) Which of the following procedures would an accountant least likely perform during an engagement to review the financial statements of a nonissuer? (Points : 10)

Observing the safeguards over access to and use of assets and records.

Comparing the financial statements with anticipated results in budgets and forecasts.

Inquiring of management about actions taken at the board of directors’ meetings.

Studying the relationships of financial statement elements expected to conform to predictable patterns.

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DeVry ACCT 591 Quiz 2 latest