AUDITING THEORY QUESTIONS AND
COMPLETE ANSWERS
Which of the following is not an assurance engagement?
a. Compilation
b. Financial statements audit
c. Information reliability services
d. Reviews of prospective financial statements ANSW✅✅a. Compilation
Non-assurance engagements include all of the following except
a. agreed-upon procedures
b. management consulting services
c. preparing of tax returns where no conclusion is expressed
d. compliance audit ANSW✅✅d. compliance audit
Independence auditing can best be described as
a. a branch of accounting
b. a discipline that attests to the results of accounting and other functional operations and data
c. a professional activity that measures and communicates financial and business data
d. a regulatory function that prevents the issuance of improper financial information ANSW✅✅c.
a professional activity that measures and communicates financial and business data
Which of the following professional services would be considered an attestation engagement?
a. a consulting service engagement to provide computer processing advice to the client
b. an engagement report on statutory requirements
c. an income tax engagement to prepare federal and state returns
d. the compilation of financial statements from a client's financial records ANSW✅✅b. an
engagement report on statutory requirements
CPAs are considered professional persons because they:
a. hold a license from a government agency
COMPLETE ANSWERS
Which of the following is not an assurance engagement?
a. Compilation
b. Financial statements audit
c. Information reliability services
d. Reviews of prospective financial statements ANSW✅✅a. Compilation
Non-assurance engagements include all of the following except
a. agreed-upon procedures
b. management consulting services
c. preparing of tax returns where no conclusion is expressed
d. compliance audit ANSW✅✅d. compliance audit
Independence auditing can best be described as
a. a branch of accounting
b. a discipline that attests to the results of accounting and other functional operations and data
c. a professional activity that measures and communicates financial and business data
d. a regulatory function that prevents the issuance of improper financial information ANSW✅✅c.
a professional activity that measures and communicates financial and business data
Which of the following professional services would be considered an attestation engagement?
a. a consulting service engagement to provide computer processing advice to the client
b. an engagement report on statutory requirements
c. an income tax engagement to prepare federal and state returns
d. the compilation of financial statements from a client's financial records ANSW✅✅b. an
engagement report on statutory requirements
CPAs are considered professional persons because they:
a. hold a license from a government agency
