AS#5 Requires Auditors Whose Public Clients Use Service Providers Considered

question 48

Multiple Choice

AS#5 requires auditors whose public clients use service providers considered significant:

• A) obtain a SAS 70 Type I report.
• B) obtain a SAS 70 report.
• C) obtain a SAS 70 Type II report.
• D) Any of the above considering the circumstances.

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Definitions:

Note Payable

A written promise to pay a specified amount of money, along with interest, by a certain date.

Cash Payment

A transaction in which money is paid out or disbursed immediately in cash.

Fees Earned

Revenue generated from providing services, recognized when the service is performed regardless of when the payment is received.

Transactions

The exchange of goods, services, or funds between two or more parties, forming the basic activities recorded in accounting.