Accounting and Review Service Engagements

Question 1

Accepting an compilation engagement is inappropriate if the projection is to be distributed too

Answer 1

Widespread use (ie potential stockholders in an offering statements)

Question 1

When client omits all disclosures required by gaap, the accountants report should include

Answer 1

Info about the omission notifying it may sway users opinions.

Question 2

An accountants compilation report for a nonissuer should include a statement that

Answer 2

Accountant compiled the financial statements in accordance with Statements on Standards for Accounting and Reviews (SSARS)

Question 3

Review VS Audit

Answer 3

Question 4

What’s difference between preparing and compiling FS

Answer 4

Preparation: Put together FS’(s). No responsibility to read or verify accuracy. No report.

Compilation: Put together FS’s and required to read FS and identify obvious material misstatements, issue a report.

Neither require independance.

Question 5

In a review, a standard unmodified review report is issued when nothings wrong. The report includes What sections:

Answer 5

Question 6

A review report should conclude

Answer 6

Question 7

When do you issue adverse opinions for review engagements?

Answer 7

When FS contains several material and pervasive departures from GAAP and management is unwilling to revise.

Question 8

Compiling Forecasted or projected information. (Note they must state)

Answer 8

Question 9

What is a prescribed form

Answer 9

Question 10

Unlike audits, comps cannot provide _____ and __________

Answer 10

a level of assurance and issue opinions. However if misstatements are identified and management doesn’t want to correct, accountant can modify report to include a paragraph noting the departure from GAAP

Question 11

A compilation of financial projection does not include

Answer 11

An evaluation of the the support for the assumptions underlying the projection.

Question 12

Review procedures

Answer 12

Question 13

Reviews provide limited _____

Answer 13

Assurance.
Obtained through inquiries and analytical procedures.

Question 14

Accountants can compile financial statements that omit substantially all disclosures if they _______

Answer 14

disclose that there are omissions in the F/S and that report is not intended for those who are uninformed about the omitted content.

Question 15

Standards and engagements

Answer 15

Question 16

Reviews do not assist management technically in ______

Answer 16

Presenting financial statements, unlike compilations.

Question 17

When a compilation is issued, a statement expressing ____ is the conclusion paragraph

Answer 17

Compilation expresses no opinion nor provides assurance on financial statements.

Question 18

Difference in emphasis of matter and other matter paragraph

Answer 18

Emphasis of matter is used when you want to draw attention to a matter that has already been disclosed.

Other matter is for matters not disclosed or present in FS.

Question 19

CPAs cannot perform audits if independence is ______

Answer 19

impaired.
If CPA has even an immaterial direct financial interest, independence is impaired.

Question 20

Even preparations of financial statements must agree on any depature from gaap and note that in engagement letter.

Answer 20

Question 21

A compilation is where accountant assists with the presentation on financial statements, but this service provinces no

Answer 21

Assurance about accuracy or completeness of information presented. Therefore it cannot be relied on to disclose errors, fraud, or illegal acts.

Question 22

Here is when SSARS is Applicable

Answer 22

Question 23

Preparation engagement

Answer 23