Which of the following is false regarding the income tax basis of accounting? A. Nondeductible expenses should be reported and expensed when they are incurred. B. Nondeductible expenses should be reported in the balance sheet in the proper category. c. Nontaxable revenues should be recognized when received or accrued dependent upon the method used D. Nontaxable revenues should be reported on the income statement The introductory paragraph of a review report consists of information that does which of the following? A. Defines a review engagement as inquiries plus analytical procedures, Identifies the fact that management is responsible for the financial statements being B. reviewed C. Indicates the financial statements that were the subject of the review. Provides the reader with the information regarding the level of assurance being expressed by the accountant D. If compiled or reviewed financial statements contain a departure from GAAP, the accountant can conclude that a modification of the standard report is appropriate. When such a modification is made, which of the following is true? B. A Disclosure of the effects of the departure is appropriate and the accountant should extend his or her procedures to determine the effects on the financial statements. Disclosure of the effects of the departure is appropriate if management has determined the effects or they are known as a result of the accountant's procedures. Disclosure of the effects of the departure is only appropriate in a review engagement as the C. scope of a compilation is not sufficient to arrive at the effects D. Disclosure of the effects of the departure is required. Which date should be used for a compilation report? A. A date agreed upon by the accountant and the client that is subsequent to the date of the financial statements being compiled B. The date the financial statements have been formally typed for presentation to the client. C. The date of the completion of the compilation D. The date of the financial statements being compiled. If, during the performances of a compilation engagement, the accountant becomes aware of information that indicates that the financial statements may be incomplete, incorrect, or otherwise unsatisfactory, the accountant should do which of the following? Add a separate paragraph to his or her compilation report that warns readers about the A. possible problem B. Insist that the client allow the performance of a review engagement C. Perform any procedures he or she wishes in attempting to obtain appropriate information Resign from the engagement and indicate the reason(s) in a letter to the client's top management D