51. In which of the following engagements is a CPA required to inquire of management about their knowledge of any fraud or suspected fraud involving management or others where the fraud could materially affect the financial statements?

a. Audit

b. Review

c. Compilation

d. All of the above

e. a and b

52. A compilation is

a. Limited to presenting in the form of financial statements information that is the representation of management, without undertaking to obtain or provide any assurance that there are material modifications that should be made to the financial statements.

b. An engagement to assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are material modifications that should be made to the financial statements.

c. Either a or b

d. Neither a or b

53. If a client requests that the accountant change the engagement from an audit or a review to a compilation, he or she may do so if:

a. The client provides reasonable justification for doing so.

b. The additional effort and cost required to complete the higher level of service is substantial.

c. Both a and b

d. Neither a or b because the accountant should never change to a lower level of service once a higher level of service has begun.

54. Which of the following levels of service may be applied to prospective financial statements?

a. Application of agreed- upon procedures

b. Examination

c. Compilation

d. All of the above

e. None of the above

T/F

55. An accountant may compile a nonpublic entitys financial statements that omit substantially all of the disclosures and the statements of cash flows required by U.S. GAAP only if the omission is (1) clearly indicated in the accountants report and (2) not undertaken with the intention of misleading the financial statement uses.