Other Reports

Question 1

May express an opinion on AR balances, even if auditor disclaimed on the Financial Statements as a whole provided that:

Answer 1

Report on AR is PRESENTED SEPARATELY from the disclaimer of opinion on Financial Statements

Question 2

Special considerations in the application of US GAAS

Answer 2

An audit of a single financial statement. Can be performed as a separate audit or in conjunction with an audit of the complete set of financial statements

Question 3

An accountant who is not independent may still be associated with the financial statements. (Can’t perform a review or an audit though)

Answer 3

For example, Compilation services

Question 4

An accountant expresses no such assurance in a….

Answer 4

compilation engagement

Question 5

Limited assurance is expressed in…(accountant is not aware of..)

Answer 5

a review engagement

Question 6

There is no limitation on the use of a …

Answer 6

Reviewed financial statement

Question 7

No opinion may be given based on a…

Answer 7

review engagement

Question 8

“substantially less in scope than an audit” and “Is not aware of any material modifications..” is in

Answer 8

The review report (not in the compilation report)

Question 9

A compilation report should state that:

Answer 9

the objective of a compilation report is to assist management in presenting financial information in the form of financial statements

Question 10

Audit Procedures not performed in a REVIEW engagement:

Answer 10

1) Tests of the accounting records
2) Tests of management’s assertions regarding continued existence
3) Inquiries of the entity’s attorney concerning contingent liabilities

Question 11

Management rep letter more likely in review or compilation?

Answer 11

Review

Question 12

If management does not provide the rep letter for a review report, then

Answer 12

the accountant must withdraw

Question 13

Difference in objectives between Review and compilation?

Answer 13

Review - Limited Assurance

Compilation - No Assurance

Question 14

Independence is not required for which engagement?

Answer 14

Compilation but state why there is a lack of independence

Question 15

Statements of Standards for Accounting and Review Services (SSARS) apply to:

Answer 15

reviews of the financial statements of nonissuers

Question 16

The objective of a review:

Answer 16

Is to provide the accountant with a reasonable basis for expressing limited assurance that there are no material modifications that should be made to the accompanying financial statements for them to be in conformity with GAAP

Question 17

Comfort letters are signed by the clients:

Answer 17

Independent auditor and is sent to the underwriter

Question 18

Comfort Letters:

Answer 18

Negative assurance for: The conformity of the entity’s unaudited condensed interim financial information with GAAP.

Positive Assurance for: The compliance of the audited financial statements and financial statement schedules included in the registration statement with the requirements of the Securities Act of 1933.

Question 19

An examination of a financial forecast is a professional service that involves:

Answer 19

1. Evaluating the preparation of the prospective financial statements
2. Evaluating the support underlying the assumptions
3. Evaluating the presentation of the prospective financial statements in conformity with AICPA guidelines
4. Issuing an examination report

Question 20

Financial Forecast may be issued for:

Answer 20

General use

Question 21

Financial Projections (What if prospectives FS) may be issued for:

Hint: The user may need to ask the responsible party questions about the underlying assumption

Answer 21

Restricted use.

Question 22

An opinion is not issued with a review but

Answer 22

may be modified to disclose departures from GAAP