21. According to PSAE 3410 which of the following assurance levels may be provided on GHG statement?

a. Reasonable

b. Limited

c. Both a and b

d. None of the above

Report on the Compilation of Pro Forma Financial Information Included in a Prospectus

22. Pro forma financial information is

a. Financial information shown together with adjustments to illustrate the impact of an event or transaction on unadjusted financial information as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration.

b. Adjustments to unadjusted financial information that illustrate the impact of a significant event or transaction ("event" or "transaction") as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. [Pro forma adjustments]

c. A document issued pursuant to legal or regulatory requirements relating to the entity's securities on which it is intended that a third party should make an investment decision. [Prospectus]

d. Financial information of the entity to which pro forma adjustments are applied by the responsible party. [Unadjusted financial information]

23. In accordance with PSAE 3420, it is presumed that pro forma financial information is presented in columnar format consisting of the following except

a. Unadjusted financial information.

b. Pro forma adjustments.

c. Resulting pro forma column.

d. Prospective financial information.

24. In accordance with PSAE 3420, which of the following performs compilation of pro forma financial information?

a. The practitioner.

b. The responsible party.

c. The intended users.

d. All of the above.

25. In an engagement to report on the compilation of pro forma financial information included in a prospectus performed in accordance with PSAE 3420, the level of assurance conveyed is

a. Absolute c. Limited

b. Reasonable d. None

26. An accountant's report on an examination of pro forma financial information should include a

a. Statement that the entity's internal control was not relied on in the review.

b. Disclaimer of opinion on the financial statements from which the pro forma financial information is derived.

c. Caveat that it is uncertain whether the transaction or event reflected in the pro forma financial information will ever occur.

d. Reference to the financial statements from which the historical financial information is derived.

Letters for Underwriters

27. In connection with a public offering of first mortgage bonds by Henson Corp., the bond underwriter has asked Henson's CPA to furnish him with a comfort letter giving as much assurance as possible relative to Henson's unaudited financial statements for the three months ended March 31, 2019.

The CPA had expressed an unqualified opinion on Henson's financial statements for the year ended December 31, 2018 and he has performed a limited review of Henson's financial statements for the three months ended March 31, 2019. Nothing has come to his attention that would indicate that the March 31, 2019 statements are not properly presented. Under these circumstances, the CPA's response to the underwriter's request should be to:

a. furnish to the underwriters an opinion that the March 31, 2019 statements are fairly presented subject to year-end audit adjustments.

b. give negative assurance as to the March 31, 2019 financial statements but disclaim an opinion on these statements.

c. inform the underwriters that no comfort letter is possible without an audit of the financial statements for the three months ended March 31, 2019.

d. Furnish to the underwriters an adverse opinion covering financial statements for the three months ended March 31, 2019.

28. Which of the following statements is correct concerning letters for underwriters, commonly referred to as comfort letters?

a. Letters for underwriters are required by the SEC the initial public sale of registered securities.

b. Letters for underwriters typically give negative assurance on unaudited interim financial information.

c. Letters for underwriters usually are included in the registration statement accompanying a prospectus.

d. Letters for underwriters ordinarily update auditors' opinions on the prior year's financial statements.

29. Comfort letters ordinarily are addressed to

a. Creditor financial institutions.

b. The client's audit committee.

c. The Securities and Exchange Commission.

d. Underwriters of securities.

30. Comfort letters ordinarily are signed by the client's

a. Independent auditor.

b. Underwriter of securities.

c. Audit committee.

d. Senior management.

WRONG ANSWERS WILL BE DISLIKED