When an accountant is not independent, which of the following is true? B. The accountant may indicate the lack of independence in the first footnote, rather than in the report letter The accountant may issue a compilation report as long as he or she indicates the lack of independence. The accountant may issue a review report as long as he or she indicates the lack of independence. c. D. The accountant must explain the reason for the lack of independence. Regarding representation letters in a review engagement, SSARS requires which of the following? A representation letter is only required in a review engagement where the scope of inquiries has been limited current management must provide the representations for the periods they were present, not for periods they were not. B. 2 C. The accountant obtains a representation letter. D. These are documents required in audits and should not be a part of a review engagement The second paragraph of a review report consists of information that does which of the following? A. Defines a review engagement. Identifies the fact that management is responsible for the financial statements being reviewed B. 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. When, if ever, can an accountant use the guidance in Statements on Auditing Standards (SAS) in the performance of a compilation or review report? The guidance in SAS should always be consulted and used if it is more appropriate than the guidance listed in the SSARS literature. B. The guidance in the SAS is only appropriate for a problem in the reporting area. Use of the guidance in SAS when performing compilation or review engagements is never C. appropriate. When the SSARS Literature does not include guidance on an issue that is relevant to a D. compilation or review engagement, the accountant can look to the SAS to help address the issue When a special purpose framework is used to present financial statements, the statements do not purport to present financial position and results of operations in accordance with GAAP. Thus, these statements should not do which of the following? A. Be captioned or otherwise referred to as balance sheet, income statement, or similar designation, as these are GAAP terms. B. Be presented in a financial statement format as GAAP statements are presented C. Include a note explaining the basis of accounting and how it differs from GAAP D. Include notes and other disclosures as required by GAAP. When an accountant is not independent, which of the following is true? B. The accountant may indicate the lack of independence in the first footnote, rather than in the report letter The accountant may issue a compilation report as long as he or she indicates the lack of independence. The accountant may issue a review report as long as he or she indicates the lack of independence. c. D. The accountant must explain the reason for the lack of independence. Regarding representation letters in a review engagement, SSARS requires which of the following? A representation letter is only required in a review engagement where the scope of inquiries has been limited current management must provide the representations for the periods they were present, not for periods they were not. B. 2 C. The accountant obtains a representation letter. D. These are documents required in audits and should not be a part of a review engagement The second paragraph of a review report consists of information that does which of the following? A. Defines a review engagement. Identifies the fact that management is responsible for the financial statements being reviewed B. 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. When, if ever, can an accountant use the guidance in Statements on Auditing Standards (SAS) in the performance of a compilation or review report? The guidance in SAS should always be consulted and used if it is more appropriate than the guidance listed in the SSARS literature. B. The guidance in the SAS is only appropriate for a problem in the reporting area. Use of the guidance in SAS when performing compilation or review engagements is never C. appropriate. When the SSARS Literature does not include guidance on an issue that is relevant to a D. compilation or review engagement, the accountant can look to the SAS to help address the issue When a special purpose framework is used to present financial statements, the statements do not purport to present financial position and results of operations in accordance with GAAP. Thus, these statements should not do which of the following? A. Be captioned or otherwise referred to as balance sheet, income statement, or similar designation, as these are GAAP terms. B. Be presented in a financial statement format as GAAP statements are presented C. Include a note explaining the basis of accounting and how it differs from GAAP D. Include notes and other disclosures as required by GAAP
