Professional Documents
Culture Documents
20-25
The attestation standards provide guidance for three basic types of engagements.
Required:
The first engagement is examination and is to provide the highest level of assurance with
the same level of assurance about other types of subject matter. The procedures used
during examination is to gather sufficient information that allow the issuance of a report
includes positive assurance regarding the subject matter. There is sufficient evidence when
attestation risk is at a low level.
The second engagement is review which performs limited procedures such as analytical
procedures and inquiries. The auditor would gather information to allow attestation risk to
a moderate level. The report will provide limited information. This is known as limited
assurance or negative assurance. This is because the report offers an opinion of the
information but includes a statement such as “We are not aware of any material
modifications that should be made in order for the information to be in conformity with the
criteria.”
20-28
The third general attestation standard indicates that the subject matter of the engagement must be capable
of reasonably consistent evaluation against criteria that are suitable and available to the user.
Required:
The criteria are standards or benchmarks that are used to evaluate the subject matter of
the engagement. This is important in reports for users to convey the basis on which the
conclusion was formed. (Whittington, Ray, Pany, p. 757)
Suitable criteria are the objective and permit reasonably consistent measurements.
(Whittington, Ray, Pany, p. 758) The criteria must be complete with no relevant factors
omitted and must measure characteristics of the subject matter that is relevant to the
decision. Criteria is suitable when it is developed by regulatory agencies or other bodies
composed of experts that use due process. Also, when developed by management or
industry groups without due process but should be evaluated with characteristics.
The available criteria are required has two parts, not only must the criteria be available,
but they also must be understandable to users. (Whittington, Ray, Pany, p. 759) Criteria is
available in the presentation or in the report. When developed by regulatory agencies using
due process the criteria are publically available and assumed understandable.
20-29
Select the best answer for each of the following and explain fully the reason for your selection.
b. When an accountant examines a financial forecast that fails to disclose several significant
assumptions used to prepare the forecast, the accountant should describe the assumptions in the
accountant's report and issue a(n):Page 773
(1) Qualified opinion.
(2) Unqualified opinion with a separate explanatory paragraph.
(3) Disclaimer of opinion.
(4) Adverse opinion.
e. When performing an examination, if a CPA finds one or more significant assumptions are not
reasonable for a forecast, the most appropriate report is:
(1) Adverse.
(2) Disclaimer.
(3) Qualified.
(4) Unqualified with emphasis-of-matter paragraph.
f. The accounting profession is currently developing assurance services related to which of the
following international information formats?
(1) C++.
(2) Webmat.
(3) Object language.
(4) XBRL.
Financial Nonfinancial
1. Yes Yes
2. Yes No
3. No Yes
4. No No
h. When reporting on a company's compliance with a law, the CPAs may report on:
1. Yes Yes
2. Yes No
3. No Yes
4. No No
i. Which is least likely
(1) An assurance service that is also an attest service.
(2) A service that is not an assurance service, but is an attest service.
(3) A historical financial statement–related assurance service.
(4) A non- historical financial information–related assurance service.
l. The assurance services being developed that address user and preparer needs regarding issues of
security, availability, processing integrity, confidentiality, and privacy within e-commerce and other
systems are referred to as:
(1) PrimePlus Services.
(2) XBRL Services.
(3) Risk Advisory Services.
(4) Trust Services.
20-31
Indicate whether a CPA may provide each of the following services, and whether independence is
required, by placing a check in the appropriate box.
Whittington, Ray, Pany, K. (1/17/2013). PPK Principles of Auditing & Other Assurance Services with
Connect Plus OLA, 19th Edition. [VitalSource Bookshelf Online]. Retrieved
from https://kaplan.vitalsource.com/#/books/1259510921/