Select the best answer for each of the following and explain fully the reason for your selection.

a. Which of the following is not typically performed when the auditors are performing a review of client financial statements?

(1) Analytical procedures applied to financial data.

(2) Inquiries about significant subsequent events.

(3) Inquiries directed to the client's legal counsel.

(4) Obtaining an understanding of accounting principles followed in the client's industry.

b. Which of the following forms of accountant association always leads to a limited distribution report?

(1) Compilation.

(2) Review.

(3) Examination.

(4) Agreed-upon procedures.

c. Which assertion is generally most difficult to attest to with respect to personal financial statements?
(1) Existence and occurrence.
(2) Rights and obligations.
(3) Completeness.
(4) Valuation.

d. Special reports are appropriate for:
(1) Reviews of interim statements.
(2) Compliance with regulatory requirements related to audited financial statements.
(3) Forecasts.
(4) Projections.

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

f. Comfort letters to underwriters are normally signed by the:
(1) Independent auditor.
(2) Underwriter.
(3) Client's lawyer.
(4) Chief executive officer.