Multiple Choice Questions
The following questions concern attestation engagements. Choose the best response.
a. Which of the following professional services is considered an attestation engagement? (1) A management consulting engagement to provide IT advice to a client.
(2) An income tax engagement to prepare federal and state tax returns.
(3) An engagement to report on compliance with statutory requirements.
(4) A compilation of financial statements from a client's accounting records.
b. A Type 1 service auditor's report on internal controls at a service organization
(1) Includes an opinion about the suitability of the design of controls at the service organization.
(2) Is based on the performance of tests of controls and substantive tests of transactions at the service organization.
(3) Contains an opinion about the operating effectiveness of internal controls at the service organization.
(4) Provides an opinion about the fair presentation of the service organization's financial statements in accordance with accounting standards.
c. Which of the following statements concerning prospective financial statements is correct?
(1) Only a financial forecast is normally appropriate for limited use.
(2) Any type of prospective financial statement is normally appropriate for limited use.
(3) Only a financial projection is normally appropriate for general use.
(4) Any type of prospective financial statement is normally appropriate for general use.