CPA Client Advisory Services 3

Question 1

A CPA using a predictive analytics tool for a CAS client identifies that the client is likely to face a cash shortfall in 60 days. This represents which type of advisory value?

Accepted Answer

Predictive/forward-looking value

Answer

Predictive analytics delivers forward-looking insights that enable proactive management decisions, a hallmark of high-value CAS engagements.

Question 2

Which metric would be MOST relevant when advising a SaaS company client on business health in a CAS engagement?

Accepted Answer

Monthly Recurring Revenue (MRR) and churn rate

Answer

MRR and churn rate are the foundational KPIs for SaaS business models, reflecting recurring revenue stability and customer retention.

Question 3

A CPA in a CAS role helps a client evaluate whether to lease or purchase equipment. This type of service is classified as:

Accepted Answer

Strategic advisory/management consulting within CAS

Answer

Lease-versus-buy analysis is a management consulting/strategic advisory service within the CAS umbrella, governed by SSCS No. 1.

Question 4

Under the AICPA's CAS framework, 'Controller Services' typically includes all of the following EXCEPT:

Accepted Answer

Conducting an independent audit of financial statements

Answer

Independent auditing is an attest function that cannot be performed by the same firm providing controller services due to independence requirements.

Question 5

A CPA advises a client on improving their accounts receivable process. Which of the following recommendations would MOST directly reduce Days Sales Outstanding (DSO)?

Accepted Answer

Implement automated invoice reminders and offer early payment discounts

Answer

Automated reminders and early-pay incentives accelerate collections, directly reducing the average number of days receivables remain outstanding.

(CPA) Certified Practicing Accountant Practice Test

(CPA) Certified Practicing Accountant Practice Test

CPA Client Advisory Services 3