61) Jones Retailing, a nonpublic entity, has asked Winters

Question : 61) Jones Retailing, a nonpublic entity, has asked Winters : 2134872

61) Jones Retailing, a nonpublic entity, has asked Winters, CPA, to compile financial statements that omit substantially all disclosures required by generally accepted accounting principles. Winters may compile such financial statements, provided the:

A) reason for omitting the disclosures is explained in the engagement letter and acknowledged in the management representation letter.

B) financial statements are prepared on a comprehensive basis of accounting other than generally accepted accounting principles.

C) distribution of the financial statements is restricted to internal use only.

D) omission is not undertaken to mislead the users of the financial statements and is properly disclosed in the accountant's report.

62) During an engagement to review the financial statements of a nonpublic entity, an accountant becomes aware of a material departure from GAAP. If the accountant decides to modify the standard review report because management will not revise the financial statements, the accountant should:

A) express negative assurance on the accounting principles that do not conform with GAAP.

B) disclose the departure from GAAP in a separate paragraph of the report.

C) issue an adverse or an "except for" qualified opinion, depending on materiality.

D) express positive assurance on the accounting principles that conform with GAAP.

63) Which set of standards was created by the AICPA to cover services relating to unaudited financial statements?

A) Standards on Selective Audits and Review Services (SSARS).

B) Statement on Auditing Standards (SAS).

C) Statements on Compilation and Review Standards (SCRS).

D) Statements on Standards for Accounting and Review Services (SSARS).

64) When engaged to compile the financial statements of a nonpublic entity, an accountant is required to possess a level of knowledge of the entity's accounting principles and practices. This requirement most likely will include obtaining a general understanding of the:

A) stated qualifications of the entity's accounting personnel.

B) design of the entity's internal controls placed in operation.

C) risk factors relating to misstatements arising from illegal acts.

D) internal control awareness of the entity's senior management.

65) This concept, while used by both internal and external auditors, is typically assessed quite differently for each.

A) Competence.

B) Objectivity.

C) Integrity.

D) Materiality.

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Auditing 1 Year Ago 333 Views
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