Standards for Accounting and Review Services, and CPA: Quiz

2439 Words Oct 8th, 2010 10 Pages
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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
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b) Acceptance and continuance of clients and engagements. c) Engagement supervision. d) Monitoring.

Answer C is correct. Engagement supervision is not an element of quality control. The five elements of quality control are (1) independence, integrity, and objectivity, (2) personnel management, (3) acceptance and continuance of clients and engagements, (4) engagement performance, and (5) monitoring.

61. As guidance for measuring the quality of the performance of an auditor, the auditor should refer to a) Statements of the Financial Accounting Standards Board. b) Generally accepted auditing standards. c) Interpretations of the Statements on Auditing Standards. d) Statements on Quality Control Standards.

Answer B is correct because auditors are responsible for compliance with generally accepted auditing standards and comparison of their performance against these standards is appropriate.

62. A basic objective of a CPA firm is to provide professional services to conform with professional standards. Reasonable assurance of achieving this basic objective is provided through a) Continuing professional education. b) A system of quality control. c) Compliance with generally accepted reporting standards. d) A system of peer review.

Answer B is correct because a system of quality control is necessary to provide a CPA firm with reasonable assurance that it is conforming to generally accepted auditing standards.
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