Reports To Memorize

Question 0

Under the clarity project, who is the standard report addressed to for ABC Company?

Answer 0

To the Board of Directors and Stockholders of ABC Company

Question 1

Under the clarity project how is a standard report titled?

Answer 1

Independent Auditor’s Report

Question 2

Recite the first paragraph of the standard report for ABC company and its subsidiaries for 20X1 and 20X0.

Answer 2

We have audited the accompanying consolidated financial statements of ABC Company and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 20X1 and 20X0, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for the years then ended, and the related notes to the financial statements.

Question 3

In the clarity project standard report, what is the name of the paragraph following the introduction?

Answer 3

Management’s Responsibility for the Financial Statements

Question 4

Recite the Management’s Responsibility for the Financial Statements paragraph from the clarity project’s standard report

Answer 4

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Question 5

What is the title of the three paragraphs following the Management’s Responsibility for the Financial Statements paragraph in the standard report of the clarity project?

Answer 5

Auditor’s Responsibility

Question 6

Recite the first paragraph of the Auditor’s Responsibility in a clarity project standard report.

Answer 6

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

Question 7

Recite the second paragraph of the Auditor’s Responsibility in a clarity project standard report.

Answer 7

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Question 8

Recite the third paragraph of the Auditor’s Responsibility in a clarity project standard report.

Answer 8

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Question 9

What is the title of the paragraph that follows the Auditor’s Responsibility paragraphs in the standard report of the clarity project?

Answer 9

Opinion paragraph

Question 10

Recite the Opinion paragraph in a clarity project standard report for ABC Company and its subsidiaries for 20X1 and 20X0.

Answer 10

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ABC Company and its subsidiaries as of December 31, 20X1 and 20X0, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Question 11

What is in the bottom left corner of a standard report for the clarity project?

Answer 11

Name of accounting firm
City, State
Date of Completion of fieldwork

Question 12

What is the title of a standard report for a publicly traded company?

Answer 12

Report of Independent Registered Public Accounting Firm

Question 13

Recite the introductory paragraph of a standard report for a publicly traded X Company for 20X3 and 20X2

Answer 13

We have audited the accompanying balance sheets of X Company as of December 31, 20X3 and 20X2, and the related statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 20X3. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

Question 14

Recite the scope paragraph of a standard report for a publicly traded company.

Answer 14

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Question 15

Recite the opinion paragraph of a standard report for a publicly traded Company for 20X3 and 20X2

Answer 15

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20X3 and 20X2, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20X3, in conformity with US generally accepted accounting principles.

Question 16

Recite the internal control paragraph of a standard report for a publicly traded X Company for 20X3, when the report is dated February 24, 20X4

Answer 16

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of X Company’s internal control over financial reporting as of December 1, 20X3, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 20X4, expressed an unqualified opinion thereon.

Question 17

What is on the bottom left corner of a standard report of a publicly traded company.

Answer 17

Signature
City and State or Country
Date

Question 19

Forecast

Answer 19

Based on conditions expected to exist

Question 20

Projection

Answer 20

Hypothetical assumptions

Question 20

Accounting services (which are reports on forecasts and projections)
3 types

Answer 20

1 examination

2 compilation

3 agreed upon procedures

Question 21

What 2 phrases do forecasts and projections include?

Answer 21

“May differ from actual”

“No responsibility to update”

Question 22

General use applies to…

Answer 22

Forecasts

Question 23

Limited use applies to…

Answer 23

Forecasts and projections

Question 24

What are the 2 possible titles for the Standard Compilation report under SSARS?

Answer 24

1 Accountant’s Compilation Report

2 Independent Accountant’s Compilation Report (independent
Can only be used when account is independent)

Question 25

Recite the introductory paragraph of the standard compilation report under SSARS. Assume it is prepared for XYZ company for the year 20XX.

Answer 25

We have compiled the accompanying balance sheet of XYZ Company as of December 31, 20XX, and the related statements of income, retained earnings, and cash flows for the year then ended. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any assurance about whether the financial statements are in accordance with accounting principles generally accepted in the United States of America.

Question 26

Recite the management responsibility paragraph of the standard compilation report under SSARS.

Answer 26

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

Question 27

Recite the accountant’s responsibility paragraph of the standard compilation report under SSARS.

Answer 27

Our responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective of a compilation is to assist management in presenting financial information in the form of financial statements without undertaking to obtain any assurance that there are no material modifications that should be made to the financial statements.

Question 28

What is the title of the standard review report under SSARS?

Answer 28

Independent Accountant’s Review Report

Question 29

Recite the introductory paragraph of the standard review report under SSARS. Assume it is prepared for XYZ company for the year 20XX.

Answer 29

We have reviewed the accompanying balance sheet of XYZ Company as of December 31, 20XX, and the related statements of income, retained earnings, and cash flows for the year then ended. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Question 30

Recite the management responsibility paragraph of the standard review report under SSARS.

Answer 30

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States Of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

Question 31

Recite the accountant’s responsibility paragraph of the standard review report under SSARS.

Answer 31

Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report.

Question 32

Recite the final paragraph of the standard review report under SSARS.

Answer 32

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.