Attestation Services and Audits Overview
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Attestation Services and Audits Overview

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Questions and Answers

Which of the following is not one of the three types of attestation services?

  • Audits, reviews, and other attestation services
  • Audits, review, and compilations (correct)
  • Reviews, compilations, and other attestation services
  • Audits, compilations, and other attestation services

    • An auditor conducting an examination should maintain which of the following attitudes to handle the possibility of material errors?

  • Professional skepticism (correct)
  • Objective judgment
  • Conservative advocacy
  • Professional responsiveness

    • What is the primary goal of a CPA when performing the attest function?

  • Examine individual transactions
  • Detect fraud
  • Determine if client's assertions are fairly stated (correct)
  • Assure consistent accounting procedures

    • What distinguishes auditors from accountants in terms of expertise?

    <p>Ability to interpret generally accepted accounting principles</p> Signup and view all the answers

    An audit can have a significant effect on which of the following types of risk?

    <p>Information risk</p> Signup and view all the answers

    Which type of audit leverages laws and regulations as its evaluation criteria?

    <p>Compliance audit</p> Signup and view all the answers

    In what scenario does a CPA issue a written communication regarding the reliability of another party's assertion?

    <p>Attestation service</p> Signup and view all the answers

    Which framework for auditing excludes agreed upon procedures?

    <p>Agreed upon procedure</p> Signup and view all the answers

    What is the primary objective of an audit of financial statements?

    <p>To express an opinion whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework.</p> Signup and view all the answers

    According to Philippine Standard on Auditing, what type of assurance do compilation procedures provide?

    <p>Negative assurance.</p> Signup and view all the answers

    How is the independence of an external auditor typically viewed if they are paid a fee by the client?

    <p>They may be sufficiently independent to conduct an audit.</p> Signup and view all the answers

    Which of the following methods is effective in reducing information risk?

    <p>All of the above.</p> Signup and view all the answers

    Which of the following is not a primary category of attestation report?

    <p>Compilation report.</p> Signup and view all the answers

    What must audit reports communicate?

    <p>The auditor’s findings to the general public.</p> Signup and view all the answers

    What factor primarily affects the independence of internal auditors?

    <p>As long as an employer-employee relationship exists.</p> Signup and view all the answers

    What assurance level is typically associated with review procedures in auditing?

    <p>Limited assurance is provided.</p> Signup and view all the answers

    Which of the following best describes the primary goal of the CPA attest function?

    <p>To enhance the credibility of financial information.</p> Signup and view all the answers

    Which of the following is a goal of the CPA attest function?

    <p>To provide a final opinion on the information presented.</p> Signup and view all the answers

    What is a critical aspect of professional skepticism in auditing?

    <p>Questioning evidence and information presented.</p> Signup and view all the answers

    Which of the following is not a type of attestation service?

    <p>Assessment of operational efficiency.</p> Signup and view all the answers

    In the context of an audit report, what is often emphasized to communicate audit findings?

    <p>Clear and concise language.</p> Signup and view all the answers

    What distinguishes auditing from other forms of financial review?

    <p>The scope of services provided.</p> Signup and view all the answers

    Which of the following statements about the scope of an audit is true?

    <p>It defines necessary audit procedures to achieve objectives.</p> Signup and view all the answers

    Which of the following is not typically part of the CPA's responsibilities in the attest function?

    <p>Assisting in financial decision making.</p> Signup and view all the answers

    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.
    • 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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    Related Documents

    Quiz No. 1 in Auditing and Assurance PDF

    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.

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