CPA Client Advisory Services 2

Question 1

A CPA providing Client Advisory Services (CAS) helps a small business owner implement a cloud-based accounting system. Which professional standard primarily governs this engagement?

Accepted Answer

AICPA SSCS No. 1

Answer

AICPA Statement on Standards for Consulting Services (SSCS) No. 1 governs CPA consulting and advisory engagements, including accounting system implementation.

Question 2

Under a CAS engagement, a CPA notices the client's internal controls over cash disbursements are inadequate. The CPA's primary obligation is to:

Accepted Answer

Communicate the deficiency to management and those charged with governance

Answer

CPAs must promptly communicate identified internal control deficiencies to appropriate levels of management and governance.

Question 3

A CPA providing outsourced CFO services prepares monthly financial statements for a client. This activity is best classified as:

Accepted Answer

A non-attest CAS engagement

Answer

Outsourced CFO services including financial statement preparation fall under non-attest CAS engagements governed by SSCS No. 1.

Question 4

When a CPA assists a client in selecting Key Performance Indicators (KPIs) for their dashboard, the MOST important initial step is:

Accepted Answer

Understanding the client's strategic objectives and decision-making needs

Answer

Effective KPI selection must align with the client's specific strategic goals and the decisions management needs to make.

Question 5

A CPA's CAS client asks for a cash flow forecast for the next 12 months to present to a bank for a loan. Which document should the CPA prepare?

Accepted Answer

Prospective financial statements — forecast

Answer

A forecast uses management's best estimate assumptions about expected conditions and is appropriate when third parties like lenders will rely on it.

(CPA) Certified Practicing Accountant Practice Test

(CPA) Certified Practicing Accountant Practice Test

CPA Client Advisory Services 2