A2

Question 1

Submission of unaudited F/S

Answer 1

Submission is defined as: presenting to a client or third parties financial statements the accountant has prepared (manually or through computer software).

Not considered as submission:
An accountant who reproduces client-prepared financial statements has not prepared those statements. Preparation of standard monthly journal entries is a bookkeeping service that also does not involve preparation of financial statement

Question 2

Types of analytical procedures

Answer 2

ratio analysis: often used to examine B/S accounts

trend analysis: appropriate for I/S accounts

Question 3

inquiries process for review engagement

Answer 3

should be made with members of management that have direct financial and accounting responsibilities. For example, the inquiries would include: the accounting principles/practices used by the entity and the method of applying them; any unusual or complex situations that may affect the financial statements; material subsequent events; and, significant journal entries or adjustments.

Question 4

Attestation standards include two standards that parallel with GAAS:

Answer 4

planning/supervision and evidence. They do not include the internal control standard.

Question 5

Partial presentations are

Answer 5

are presentations of prospective financial information which would not ordinarily be appropriate for general use because they omit one or more of these essential elements:

(a) sales or gross revenue,
(b) gross profit or cost of sales,
(c) unusual or infrequently occurring items,
(d) provision for income taxes,
(e) discontinued operations or extraordinary items,
(f) income from continuing operations,
(g) net income,
(h) earnings per share, and
(i) significant changes in financial position.

Question 6

The difference between compilation on historical F/S and prospective financial statement: (one of them)

Answer 6

Inquiry is not required in historical F/S but in compilation to prospective F/S: An accountant performing an engagement to compile prospective financial statements should make inquiries about the accounting principles used in the preparation of the prospective financial statements.