1 – Which is a criteria for which a firm should establish…

Question Answered step-by-step 1 – Which is a criteria for which a firm should establish… 1 – Which is a criteria for which a firm should establish procedures, in accordance with Statement on Quality Control Standards No. 8, A Firm’s System of Quality Control, for the acceptance and continuance of client relationships and specific engagements designed to provide the firm with reasonable assurance that it will undertake or continue relationships and engagements only when the firm:A. Has considered the integrity of the clientB. Can comply with continuing education requirementsC. Has ten years of experience with similar engagementsD. Can hire qualified experience staff  2 – When deciding whether to accept an engagement to audit a 403(b) plan, which is an example of what a firm should consider when determining whether it has the competence, capabilities and resources to undertake the engagement?A. The firm has over 100 audit and attest clients in total and has been in existence for over ten years.B. The assigned audit manager has over ten years of experience on a wide variety of client industries.C. The audit partner specializes in audits of employee benefit plans and has other 403(b) plan clients.D. The firm can also offer Form 5500 preparation and financial statement preparation services. 3 – Which of the following is an example of a procedure that a firm can perform to consider the integrity of a prospective employee benefit plan client:A. Make inquiries of the prospective client’s family and friends regarding the predecessor auditors.B. Assess managements commitment to making the plan sponsor’s business profitable by reviewing the business plan.C. Conduct a background check of the business, its officers, and the person(s) in question by using an investigative firm.D. Respond to a request for proposal to perform attest services for an employee benefit plan. 4 – Which of the following is an example of a situation where a firm cannot comply with legal and relevant ethical requirements, and, therefore, may decide not to accept or continue an employee benefit plan client relationship?A. The firm documents significant issues, consultations and conclusions relating to the acceptance or continuance of client relationships and specific engagements.B. The firm requires a written engagement letter documenting the understanding with the client and obtains the clients signature for all engagements.C. The firm requests that the Form 5500 be filed with draft financial statements because it is unable to complete the engagement by the deadline.D. The firm evaluates that specialists and specialized knowledge are required in order to complete the engagement. 5  – Which are the possible independence requirements that may be associated with a defined contribution plan audit?A. AICPA, DOL, and SECB. DOL, IRS and PBGCC. SEC, PCAOB and EDGARD. AICPA, NASBA and FinREC 6 – What is the effect on the audit if the plan offers participants the option to purchase shares of employer securities that are registered under the Securities Act of 1933?A. The plan is required to file Form 5558 and attach financial statements audited by an independent qualified public accountant.B. The plan is required to file Form S-8 with the SEC and submit financial statements audited by a member of the SEC practice section.C. The plan is required to file Form 5500 and attach financial statements audited in accordance with SEC rules and regulations.D. The plan is required to file Form 11-K and attach financial statements audited in accordance with auditing standards of the Public Company Accounting Oversight Board. 7 – DOL rules would consider independence to be impaired with respect to a plan if during the period of the professional engagement, at the date of the opinion, or during the period covered by the financial statements the auditor or other “member” of the firm had a direct or material indirect financial interest in: A. The plan or the plan sponsorB. The plan sponsor and affiliatesC. The plan and it’s third-party service organizationsD. The plan or accounting firm 8 – According to the AICPA Professional Ethics Executive Committee (PEEC) interpretation, which non-attest service will not impair independence if certain requirements are met?A. Investment advisory servicesB. Financial statement preparationC. Plan administration services.D. Participant account recordkeeping 9 – Which of the following statements is correct regarding the preparation of an engagement letter in accordance with AU-C section 210, Terms of Engagement?A. The terms of the engagement should be documented in a memo to the engagement workpapers.B. The engagement letter should state the scope of the audit and whether the plan administrator has requested an ERISA limited-scope audit of the plan’s net assets.C. The engagement letter should be prepared and delivered in person on the first day of fieldwork and signed by the completion of planning.D. The engagement letter should be addressed to the plan sponsor or the plan administrator and should specifically name the plan being audited. 10 – Which of the following is an example of additional language that may be added to the engagement letter for certain situations?A. The engagement letter template has been updated for the clarified auditing standards.B. The specific dates of the financial statements covered by the audit.C. The auditor’s responsibility with respect to the information in the Form 5500.D. The arrangements concerning the involvement of the audit staff and partners. Business Accounting AUDITING AUD101 Share QuestionEmailCopy link Comments (0)