Audit Chapter 19 HW

In which of the following reports should a CPA not express negative (limited) assurance? Multiple Choice A standard compilation report on financial statements of a nonpublic entity. A standard review report on interim financial statements of a public entity. A standard review report on financial statements of a nonpublic entity. A comfort letter on financial information included in a registration statement filed with the Securities and Exchange Commission.

A standard compilation report on financial statements of a nonpublic entity.

A compilation of the financial statements of a nonpublic company.

Accounting and Review Services Committee Statements on Standards for Accounting and Review Services

A quarterly review of the financial statements of a nonpublic company that annually has a review of its financial statements. (Note: The question is on the quarterly review.)

Accounting and Review Services Committee Statements on Standards for Accounting and Review Services

An annual review of the financial statements of a nonpublic company.

Accounting and Review Services Committee Statements on Standards for Accounting and Review Services

The proper report by an auditor relating to summarized financial statements includes: Multiple Choice A statement about the type of opinion expressed in the prior year. An adverse opinion. An opinion on whether the summarized information is fairly stated in all material respects in relation to the basic financial statements. No assurance on the information.

An opinion on whether the summarized information is fairly stated in all material respects in relation to the basic financial statements.

A quarterly review of the financial statements of a nonpublic company that has an annual audit.

Auditing Standards Board Statements on Auditing Standards

A report on summary financial statements of a nonpublic company.

Auditing Standards Board Statements on Auditing Standards

An audit of the financial statements of a nonpublic company.

Auditing Standards Board Statements on Auditing Standards

When performing a review of a nonpublic company, which is least likely to be included in auditor inquiries of management members with responsibility for financial and accounting matters? Multiple Choice Subsequent events. Significant journal entries and other adjustments. Communications with related parties. Unusual or complex situations affecting the financial statements.

Communications with related parties.

Which of the following is not typically performed when the auditors are performing a review of client financial statements? Multiple Choice Analytical procedures applied to financial data. Inquiries about significant subsequent events. Confirmation of accounts receivable. Obtaining an understanding of accounting principles followed in the client's industry.

Confirmation of accounts receivable.

A proper compilation report on financial statements that omit note disclosures: Multiple Choice Includes an adverse opinion. Includes a disclaimer of opinion on the accuracy of such note disclosures. Indicates that management has omitted such information. Indicates that note disclosures are not necessary for those not informed about such matters.

Indicates that management has omitted such information.

Concerning interim quarterly financial statements, management of public companies: Multiple Choice Must engage CPAs to audit the statements. Must engage CPAs to review the statements. May choose to engage CPAs to review the statements.

Must engage CPAs to review the statements.

Which of the following must be obtained in a review of a nonpublic company? Engagement Letter Representation Letter (1) Yes Yes (2) Yes No (3) No Yes (4) No No

Option 1

A CPA who is not independent may perform which of the following services for a nonpublic company? Compilation Review (1) Yes Yes (2) Yes No (3) No Yes (4) No No

Option 2

A letter to an underwriter of a public company.

PCAOB Auditing Standards

A quarterly review of the financial statements of a public company that has an annual audit.

PCAOB Auditing Standards

An audit of a public company.

PCAOB Auditing Standards