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Questions and Answers
Which of the following is not one of the three types of attestation services?
Which of the following is not one of the three types of attestation services?
An auditor conducting an examination should maintain which of the following attitudes to handle the possibility of material errors?
An auditor conducting an examination should maintain which of the following attitudes to handle the possibility of material errors?
What is the primary goal of a CPA when performing the attest function?
What is the primary goal of a CPA when performing the attest function?
What distinguishes auditors from accountants in terms of expertise?
What distinguishes auditors from accountants in terms of expertise?
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An audit can have a significant effect on which of the following types of risk?
An audit can have a significant effect on which of the following types of risk?
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Which type of audit leverages laws and regulations as its evaluation criteria?
Which type of audit leverages laws and regulations as its evaluation criteria?
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In what scenario does a CPA issue a written communication regarding the reliability of another party's assertion?
In what scenario does a CPA issue a written communication regarding the reliability of another party's assertion?
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Which framework for auditing excludes agreed upon procedures?
Which framework for auditing excludes agreed upon procedures?
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What is the primary objective of an audit of financial statements?
What is the primary objective of an audit of financial statements?
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According to Philippine Standard on Auditing, what type of assurance do compilation procedures provide?
According to Philippine Standard on Auditing, what type of assurance do compilation procedures provide?
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How is the independence of an external auditor typically viewed if they are paid a fee by the client?
How is the independence of an external auditor typically viewed if they are paid a fee by the client?
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Which of the following methods is effective in reducing information risk?
Which of the following methods is effective in reducing information risk?
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Which of the following is not a primary category of attestation report?
Which of the following is not a primary category of attestation report?
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What must audit reports communicate?
What must audit reports communicate?
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What factor primarily affects the independence of internal auditors?
What factor primarily affects the independence of internal auditors?
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What assurance level is typically associated with review procedures in auditing?
What assurance level is typically associated with review procedures in auditing?
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Which of the following best describes the primary goal of the CPA attest function?
Which of the following best describes the primary goal of the CPA attest function?
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Which of the following is a goal of the CPA attest function?
Which of the following is a goal of the CPA attest function?
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What is a critical aspect of professional skepticism in auditing?
What is a critical aspect of professional skepticism in auditing?
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Which of the following is not a type of attestation service?
Which of the following is not a type of attestation service?
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In the context of an audit report, what is often emphasized to communicate audit findings?
In the context of an audit report, what is often emphasized to communicate audit findings?
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What distinguishes auditing from other forms of financial review?
What distinguishes auditing from other forms of financial review?
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Which of the following statements about the scope of an audit is true?
Which of the following statements about the scope of an audit is true?
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Which of the following is not typically part of the CPA's responsibilities in the attest function?
Which of the following is not typically part of the CPA's responsibilities in the attest function?
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Study Notes
Attestation Services
- Attestation services are services in which the CPA firm issues a written communication that expresses a conclusion with respect to the reliability of a written assertion that is the responsibility of another party.
- Types of attestation services: Audits, reviews, and other attestation services.
Professional Skepticism
- When conducting an examination in accordance with generally accepted auditing standards, the auditor should conduct the examination with an attitude of professional skepticism.
Goal of CPA in Attestation
- Auditors aim to determine whether the client's assertions are fairly stated.
Auditor Expertise
- Auditors' expertise lies in their ability to interpret generally accepted accounting principles and accumulate and interpret evidence.
Impact of Audits
- Audits have a significant effect on information risk.
Types of Audits
- Compliance audits use laws and regulations as their criteria.
Framework for Auditing and Related Services
- The framework covers review, compilation, and agreed-upon procedures, but excludes tax services.
Review Engagement Objectives
- Review engagement objectives include expressing a limited assurance to users who have agreed upon procedures.
Auditing as a Discipline
- Auditing is a discipline that attests to the results of accounting and other operations and data.
Audit Criteria
- Generally accepted accounting principles are usually used as criteria for evaluating quantitative information in audits of historical financial statements.
Postulates of Auditing
- There is no long-term conflict between the auditor and the management of the enterprise under audit.
Origin of the Word "Audit”
- Audit comes from the Latin word "AUDIRE", which means "to hear."
Distinguishing Auditing, Attestation, and Assurance
- The scope of services clearly distinguishes auditing, attestation, and assurance.
Scope of an Audit
- The scope of an audit refers to the audit procedures deemed necessary in the circumstances to achieve the objective of the audit.
Financial Audit (FA), Compliance Audit (CA), and Operational Audit (OA)
- A supervisor is not carrying out his assigned responsibilities (OA).
- A company's tax return does not conform to income tax laws and regulations (CA).
- A municipality's financial statements correctly show actual cash receipts and disbursements (FA).
- A company's receiving department is inefficient (OA).
Internal Auditor Independence
- Internal auditors cannot be independent as long as an employer-employee relationship exists.
Objective of Audit of Financial Statements
- To express an opinion whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework.
Compilation Procedures
- Compilation procedures are designed to enable the accountant to express a negative assurance.
Auditor Independence
- An external auditor, although paid by the client, may be sufficiently independent to conduct an audit.
Reducing Information Risk
- To reduce information risk, have the user verify the information, share the information risk with management, and provide audited financial statements.
Attestation Report Categories
- Compilation reports are not a primary category of attestation reports.
Audit Report Communication
- Audit reports must communicate the auditor's findings to the general public.
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Description
Explore the essential concepts of attestation services, including the various types and the role of professional skepticism in audits. This quiz will help you understand the CPA's goals and expertise in determining the reliability of client assertions. Dive into the impact of audits on information risk and the framework that guides auditing practices.
