Standards for Accounting and Review Services, and CPA: Quiz

Only available on StudyMode
  • Download(s) : 518
  • Published : September 21, 2010
Open Document
Text Preview
r
Answer D is correct because the SSARS requirements do not apply to either the processing of financial data for clients of other CPA firms or to consulting on accounting matters. See AR 100 for these and additional services to which the SSARS do not apply.

54. Statements on Standards for Accounting and Review Services establish standards and procedures for which of the following engagements? a) Assisting in adjusting the books of account for a partnership. b) Reviewing interim financial data required to be filed with the SEC. c) Processing financial data for clients of other accounting firms. d) Compiling an individual’s personal financial statement to be used to obtain a mortgage. Answer D is correct. The SSARS apply when a CPA either compiles or reviews the financial statements of a nonpublic entity.

55. Blue Co., a privately held entity, asked its tax accountant, Cook, a CPA in public practice, to reproduce Blue’s internally prepared interim financial statements on Cook’s microcomputer when Cook prepared Blue’s quarterly tax return. Cook should not submit these financial statements to Blue unless, as a minimum, Cook complies with the provisions of a) Statements on responsibilities in Tax Practice.

b) Statements on Standards for Accounting and Review Services. c) Statements on Responsibilities in Unaudited Financial Services. d) Statements on Standards for Attestation Engagements.

Answer B is correct because Statements on Standards for Accounting and Review Services apply (AR 100) and require that the CPA who wishes to submit such financial statements to a client must, at a minimum, meet the compilation requirements.

56. A CPA should not submit unaudited financial statements of a nonpublic company to a client or others unless, as a minimum, the CPA complies with the provisions applicable to a) Compilation engagements.

b) Review engagements.
c) Statements on auditing standards.
d) Attestation standards.

Answer A is correct. An accountant should not submit such information unless he has, at a minimum, complied with the provisions applicable to a compilation engagement. .
57. An accountant who is not independent of a client is precluded from issuing a a) Compilation report on historical financial statements. b) Compilation report on prospective financial statements. c) Special report on compliance with contractual agreements. d) Report on consulting services.

Answer C is correct because providing special reports is an attestation service and therefore requires the accountant to be independent.

58. Which of the following replies does not include a portion of the “Special Committee on Assurance Services” definition of assurance services? a) A consulting service.
b) Improve the quality of information.
c) Improve the context of information.
d) For decision makers.

Answer A is correct because the Special Committee on Assurance Services, also referred to as the Elliott Committee, defined assurance services as independent professional services -not "a consulting service"-that improve the quality of information, or its context, for decision makers.

59. In connection with the element of inspection, a CPA firm’s system of quality control should ordinarily provide for the maintenance of a) A file of minutes of staff meetings.
b) Undated personnel files.
c) Documentation to demonstrate compliance with its policies and procedures. d) Documentation to demonstrate compliance with peer review directives.

Answer C is correct. The requirement is to determine what inspection, an element of quality control, should include. Answer C is the most accurate because it provides for maintenance of documentation of the various quality control policies and procedures. Thus, it is all encompassing. Answers A, B, and D, while desirable, relate to more specific areas and are thus less complete than C.

60. Which of the following is...
tracking img