Auditing: The Art and Science of

TEST BANK

Auditing: The Art and Science of

Assurance Engagements 16 th

Canadian Edition Alvin A. Beebe Ra ndal J. Elder Mark S. Beasley Chris E. Hogan Joanne C. Jones

All Chapters Arranged Reverse: 20-1

This is the Original Test Bank for 16 th Canadian Edition, All Other Files in the Market are Wrong/Old Questions. 1 / 4

Auditing: The Art and Science of Assurance Engagements, 16Ce (Arens)

Chapter 20 Other Audits, Assurance Engagements, and Related Services 20.1 Explain how practitioners determine which standards apply to different types of engagement.1) The Locker Building is a new apartment building in a Vancouver suburb. In order to receive a subsidy from the municipality, it needs to prove that it has complied with the city's new rules about "green efficiency." The "green efficiency" rules are described on the municipality's website and list the requirements a building must meet to be considered green and efficient. Your firm, with the help of an environmental scientist, has been asked to perform a direct reporting engagement for the Locker Building. The suitable criteria, in this case, are the

• green efficiency rules.
• auditor's judgment.
• environmental scientist's judgment.
• federal environmental laws.

Answer: A

Diff: 3 Type: MC Learning Objective: 20-1 Explain how practitioners determine which standards apply to different types of engagement.2) Blue Sky Inc. is seeking a public accountant to perform either a compilation or a review engagement. What standard will the public accountant apply to the Blue Sky engagement?

• Canadian Auditing Standards (CASs)
• Other Canadian Standards (OCSs)
• CAS 100- 700 for historical financial statements
• CAS 805 for historical financial information other than financial statements

Answer: B

Diff: 2 Type: MC Learning Objective: 20-1 Explain how practitioners determine which standards apply to different types of engagement.3) Revan LLP, Public Accountants, were contacted by Giovanni Media Inc., who was seeking an auditor. Giovanni's CFO added that what the company requires is an audit of an accounts receivable schedule prepared in accordance with financial reporting provisions established by a regulator, the Canadian Radio and Television Commission. What standard would be appropriate for this engagement?

• CAS 800 for historical financial statements
• Other Canadian Standards (OCSs)
• CAS 100- 700 for historical financial statements
• CAS 805 for historical financial information other than financial statements

Answer: D

Diff: 2 Type: MC Learning Objective: 20-1 Explain how practitioners determine which standards apply to different types of engagement.1 Copyright © 2025 Pearson Canada Inc. 2 / 4

4) What level of assurance is provided by Canadian standards for review engagements?

• total assurance
• reasonable assurance
• limited assurance
• no assurance

Answer: C

Diff: 2 Type: MC Learning Objective: 20-1 Explain how practitioners determine which standards apply to different types of engagement.

20.2 Explain audits of special-purpose framework financial statements and audits of single financial statements and special elements, accounts or other items.1) Which of the following is an example of Audit of specific element, account or item of a financial statement?

• Audit of balance sheet, prepared in accordance with ASPE
• Audit of cash receipts and Disbursements schedule prepared in accordance with cash receipts

and disbursements basis of accounting

• Audit of schedule of profit participation or employee bonuses, including explanatory notes

prepared in accordance with the bonus plan

• Audit of an accounts receivable Schedule prepared in accordance with financial reporting

provisions established by a regulator

Answer: D

Diff: 3 Type: MC Learning Objective: 20-2 Explain audits of special-purpose framework financial statements and audits of single financial statements and special elements, accounts or other items.2) Which of the following is an example of an Audit of single financial statement?

• Audit of balance sheet, prepared in accordance with ASPE
• Audit of a schedule of net tangible assets, including related notes prepared in accordance with

IFRS

• Audit of a schedule of net tangible assets, prepared in accordance with ASPE
• Audit of an accounts receivable Schedule prepared in accordance with financial reporting

provisions established by a regulator

Answer: A

Diff: 3 Type: MC Learning Objective: 20-2 Explain audits of special-purpose framework financial statements and audits of single financial statements and special elements, accounts or other items.2 Copyright © 2025 Pearson Canada Inc. 3 / 4

3) Describe the different forms of audits of Other Historical Information and provide examples.Answer: Audits of other historical information include: 1)Audit of single financial statement e.g.a.Audit of balance sheet, prepared in accordance with ASPE b.Audit of cash receipts and Disbursements schedule prepared in accordance with cash receipts and disbursements basis of accounting c.Audit of schedule of profit participation or employee bonuses, including explanatory notes prepared in accordance with the bonus plan And 2)Audit of specific element, account or item of a financial statement a.Audit of an accounts receivable Schedule prepared in accordance with financial reporting provisions established by a regulator Audit of a schedule of net tangible assets, including related notes prepared in accordance with IFRS (general purpose– applicable standard CAS 800) Diff: 3 Type: ES Learning Objective: 20-2 Explain audits of special-purpose framework financial statements and audits of single financial statements and special elements, accounts or other items.

20.3 Explain what factors practitioners take into consideration to determine what type of engagement to recommend for historical financial statements.1) Four different engagements that the auditor can complete are compilation, bookkeeping, audit, and review. Rank these engagements with respect to the level of assurance provided from the highest assurance level to the lowest assurance level.

• audit, review, compilation, bookkeeping
• audit, compilation, review, bookkeeping
• review, audit, compilation, bookkeeping
• bookkeeping, compilation, review, audit

Answer: A

Diff: 3 Type: MC Learning Objective: 20-3 Explain what factors practitioners take into consideration to determine what type of engagement to recommend for historical financial statements.2) Performing inquiry, analytical procedures, and discussion with the limited objective of assessing whether the information being reported on is plausible within the framework of appropriate criteria is the definition of a(n)

• compilation.
• review.
• audit.
• examination.

Answer: B

Diff: 1 Type: MC Learning Objective: 20-3 Explain what factors practitioners take into consideration to determine what type of engagement to recommend for historical financial statements.3 Copyright © 2025 Pearson Canada Inc.

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