ACC 480 Chapter 21 Exam Questions With 100% Correct Answers.

ACC 480 Chapter 21 Exam Questions With 100% Correct Answers. Assurance services are independent professional services that improve the quality of information specifically for internal decision makers. - answerFalse Electronic commerce is an example of a category of assurance services. - answerTrue The purpose of an attestation engagement is to provide users of information with an opinion, conclusion, or findings regarding the reliability of subject matter or an assertion about the subject matter, as measured against suitable and available criteria. - answerTrue Examples of attest engagements include examination, review, and agreed-upon procedures engagements. - answerTrue Limited assurance is provided in a review engagement. - answerTrue Auditing standards do not allow private companies to have an audit of internal control over financial reporting integrated with the audit of their financial statements. - answerFalse The practitioner's objective in an engagement to audit an entity's internal control is to assess management's assessment of the effectiveness of internal controls. - answerFalse Under the attestation standards, a practitioner can either examine or perform agreed-upon procedures on prospective financial information. - answerTrue In performing an attestation engagement, a CPA typically: A) supplies litigation support services. B) assesses control risk at a low level. C) expresses a conclusion about an assertion. D) provides management consulting advice. - answerC) expresses a conclusion about an assertion. Prospective financial statements may be prepared for: A) only general use. B) only limited use. C) only internal use. D) general, limited, and internal use. - answerD) general, limited, and internal use. Given one or more hypothetical assumptions, a responsible party may prepare, to the best of his knowledge and belief, an entity's expected financial position, results of operations, and changes in cash flows. Such prospective financial statements are known as: A) pro forma financial statements. B) financial projections. C) partial presentations. D) financial forecasts. - answerB) financial projections. Which of the following are prospective financial statements upon which an accountant may appropriately report for general use? A) Pro forma financial statements. B) Financial projections. C) Partial presentations. D) Financial forecasts. - answerD) Financial forecasts. Accepting an engagement to examine an entity's financial projections would most likely be appropriate if distribution of the projections were limited to: A) the general public on the entity's website. B) potential stockholders who request a prospectus or a registration statement. C) a bank with which the entity is negotiating for a loan. D) all stockholders of record as of the report date. - answerC) a bank with which the entity is negotiating for a loan. An examination of a financial forecast is a professional service that involves: A) compiling or assembling a financial forecast that is based on management's assumptions. B) limiting the distribution of the accountant's report to management and the board of directors. C) assuming responsibility to update management on key events for one year after the report's date. D) evaluating whether the computations of prospective amounts are mathematically accurate and assumptions are internally consistent. - answerD) evaluating whether the computations of prospective amounts are mathematically accurate and assumptions are internally consistent. Limited assurance is provided in: A) an audit engagement. B) a compilation engagement. C) a review engagement. D) none of the items listed. - answerC) a review engagement. Absolute assurance is provid