1. Francois, a CPA, has agreed to a compilation engagement for a client and is preparing the financial statements based on the client's information. If Francois feels that the financial statements will be misleading based on information provided by the client, how should he proceed?

a. Francois should not be concerned about whether the financial statements are misleading, since this is only a compilation engagement.

b. Francois should correct the financial statements even if the client does not agree to the necessary changes.

c. Francois should issue an adverse opinion.

d. Francois should resign from the engagement.

2. A CPA has been engaged to compile financial statements for a nonpublic client.Which of the following statements best describes this engagement?

a. The CPA must perform the basic accepted auditing procedures necessary to determine that the statements are in conformity with GAAP.

b. The CPA is performing an accounting service rather than an examination of financial statements.

c. The financial statements are representations of both management and the CPA.

d. The CPA may prepare the statements from the books but may not assist in adjusting and closing the books.

3. Which of the following is not correct concerning "specified parties" of an agreed-upon procedures report under either the auditing or attestation standards?

a. They must agree on the procedures to be performed.

b. They must take responsibility for the adequacy of the procedures performed.

c. They must sign an engagement letter.

d. After completion of the engagement, another party may be added as a specified user.

4. Which of the following provides a "notice to reader"?

a. A review engagement

b. A compilation engagement

c. Any assurance engagement

d. An external audit

5. The objective of a review engagement

a. Is to enable the auditor to express an opinion whether the financial statements are prepared in all material respects, in accordance with an identified financial reporting framework

b. Is to enable the auditor to state whether, on the basis of procedures which do not provide all the evidence that would be required in an audit, anything has come to the auditor's attention that causes the auditor to believe that the financial statements are not prepared in all material respects, in accordance with an identified financial reporting framework.

c. Is to carry out those procedures of an audit nature to which the auditor and the entity and any appropriate third parties have agreed and to report on factual findings.

d. Is to use accounting expertise as opposed to auditing expertise to collect, classify and summarize financial information.

STRICTLY CORRECT ANSWERS ONLY