Other Reporting Responsibilities Flashcards
- Financial statements of an entity that have been reviewed by an accountant should be accompanied by a report stating that a review
A. Provides only limited assurance that the financial statements are fairly presented.
B. Includes examining, on a test basis, information that is the representation of management.
C. Consists principally of inquiries of company personnel and analytical procedures applied to financial data.
D. Does not contemplate obtaining corroborating evidential matter or applying certain other procedures ordinarily performed during an audit.
C. Consists principally of inquiries of company personnel and analytical procedures applied to financial data.
- An accountant’s report on a review of the financial statements of an entity should state that the accountant
A. Does not express an opinion or any form of limited assurance on the financial statements.
B. Conducted the review in accordance with the Philippine Standard on Review Engagements.
C. Obtained reasonable assurance about whether the financial statements are free of material misstatements.
D. Examined evidence, on a test basis, supporting the amounts and disclosures in the financial statements.
B. Conducted the review in accordance with the Philippine Standard on Review Engagements.
- Financial statements of an entity that have been reviewed by an accountant should be accompanied by a report stating that
A. The scope of the inquiry and analytical procedures performed by the accountant has not been restricted.
B. The financial statements are the responsibility of the company’s management.
C. A review includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
D. A review is greater in scope than a compilation, the objective of which is to present financial statements that are free of material misstatements.
B. The financial statements are the responsibility of the company’s management.
- An accountant who reviews the financial statements of an entity should issue a report stating that a review
A. Provides less assurance than an audit.
B. Provides negative assurance that internal control is functioning as designed.
C. Provides only limited assurance that the financial statements are fairly presented.
D. Is substantially more in scope than a compilation.
A. Provides less assurance than an audit.
- When compiling the financial statements of an entity, an accountant should
A. Review agreements with financial institutions for restrictions on cash balances.
B. Understand the accounting principles and practices of the entity’s industry.
C. Inquire of key personnel concerning related parties and subsequent events.
D. Perform ratio analyses of the financial data of comparable prior periods.
B. Understand the accounting principles and practices of the entity’s industry.
- When compiling an entity’s financial statements, an accountant would be least likely to
A. Perform analytical procedures designed to identify relationships that appear to be unusual.
B. Read the compiled financial statements and consider whether they appear to include adequate disclosure.
C. Obtain an acknowledgment from management of its responsibility for the financial statements.
D. Plan the work so that an effective engagement will be performed.
A. Perform analytical procedures designed to identify relationships that appear to be unusual.
- Which of the following should not be included in an accountant’s report based upon the compilation of an entity’s financial statements?
A. A statement that a compilation of the company’s financial statements was made in accordance with the Philippine Standard on Related Services applicable to compilation engagements.
B. A statement that management is responsible for the financial statements.
C. A statement that the accountant has not audited or reviewed the statements.
D. A statement that the accountant does not express an opinion but provides only negative assurance on the statements.
D. A statement that the accountant does not express an opinion but provides only negative assurance on the statements.
- Negative assurance may be expressed when an accountant is requested to report agreed-upon procedures to specified
Elements of a Accounts of a
Financial Statement Financial Statement
A. Yes Yes
B. Yes No
C. No No
D. No Yes
C. No No
- An accountant may accept an engagement to apply agreed-upon procedures that are not sufficient to express an opinion on one or more specified accounts or items of a financial statement provided that
A. The accountant’s report does not enumerate the procedures performed.
B. The financial statements are prepared in accordance with a comprehensive basis of accounting other than generally accepted accounting principles.
C. Distribution of the accountant’s report is restricted.
D. The accountant is also the entity’s continuing auditor.
C. Distribution of the accountant’s report is restricted.
- Given one or more hypothetical assumptions, a responsible party may prepare, to the best of its knowledge and belief, an entity’s expected financial position, results of operations, and cash flows. Such prospective financial statements are known as
A. Pro forma financial statements
B. Financial projections
C. Partial presentations
D. Financial forecasts
B. Financial projections
- A financial forecast consists of prospective financial statements that present an entity’s expected financial position, results of operations, and cash flows. A forecast
A. Is based on the most conservative estimates.
B. Present estimates given one or more hypothetical assumptions.
C. Unlike a projection, may contain a range.
D. Is based on assumptions reflecting conditions expected to exist and courses of action expected to be taken.
D. Is based on assumptions reflecting conditions expected to exist and courses of action expected to be taken.
- When an accountant examines prospective financial statements, the accountant’s report should include a separate paragraph that
A. Contains an opinion as to whether the prospective financial statements are properly prepared on the basis of the assumptions and are presented in accordance with generally accepted accounting principles in the Philippines.
B. Provides an explanation of the differences between an examination and an audit.
C. States that the accountant is responsible for events and circumstances up to 1 year after the report’s date.
D. Disclaims an opinion on whether the assumptions provide a reasonable basis for the prospective financial statements.
A. Contains an opinion as to whether the prospective financial statements are properly prepared on the basis of the assumptions and are presented in accordance with generally accepted accounting principles in the Philippines.
- The following statements relate to the examination of prospective financial information. Which is false?
A. The auditor should express an opinion as to whether the results shown in the prospective financial information will be achieved.
B. Before accepting an engagement to examine prospective financial information, the auditor should consider the intended use of the information.
C. The auditor should not accept, or should withdraw from, an engagement to examine prospective financial information when the assumptions are clearly unrealistic.
D. When in the auditor’s judgment an appropriate level of satisfaction has been obtained, the auditor is not precluded from expressing positive assurance regarding the assumptions.
A. The auditor should express an opinion as to whether the results shown in the prospective financial information will be achieved.
- Which of the following is a prospective financial information for general use upon which an accountant may appropriately report?
A. Financial projection
B. Partial presentation
C. Pro forma financial statement
D. Financial forecast
D. Financial forecast
