CPA Auditing and Attestation practice questions, page 40 of 41, with answer review and explanations.
Question 196
Which of the following is true about management representations obtained during an engagement to review the financial statements of a nonissuer?
Written representations from the current management are required for all periods being reported on.
Written representations with respect to prior periods should not be provided by the current management if they were not present during those periods.
Written representations should be addressed to members of management whom the accountant believes are responsible for and knowledgeable about the matters covered in the representation letter.
Written representations need not include information concerning subsequent events.
Question 197
In reviewing the financial statements of a nonissuer, an accountant is required to modify the standard review report for which of the following matters?
Option A
Option B
Option C
Option D
Question 198
An accountant has compiled the financial statements of a nonissuer but declines to issue a compilation report. This is an example of:
An inappropriate reporting decision, because SSARS require that a report be issued whenever an accountant is associated with financial statements.
An inappropriate reporting decision, if the accountant is not independent with respect to the nonpublic entity.
An appropriate reporting decision, if the compiled financial statements are not expected to be used by a third party.
An appropriate reporting decision, as long as the financial statements are prepared in conformity with GAAP.
Question 199
An accountant compiles unaudited financial statements that are not expected to be used by a third party. The accountant may decline to issue a compilation report provided: I. Each page of the financial statements is clearly marked to restrict its use. II. A written engagement letter is used to document the understanding with the client. III. A written representation letter is obtained from the client's management.
Option A
Option B
Option C
Option D
Question 200
An accountant has compiled the financial statements of a nonissuer in accordance with Statements on Standards for Accounting and Review Services (SSARS). The financial statements are expected to be used by a third party. Does SSARS require that the compilation report be printed on the accountant's letterhead and that the report be manually signed by the accountant?