Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

AICPA CPA-Auditing Exam - Topic 2 Question 68 Discussion

An accountant has been asked to issue a review report on the balance sheet of a nonissuer but not to report on the other basic financial statements. The accountant may not do so:
A) Because compliance with this request would result in a violation of the ethical standards of the profession.
B) Because compliance with this request would result in an incomplete review.
C) If the review of the balance sheet discloses material departures from GAAP.
D) If the scope of the inquiry and analytical procedures has been restricted.

AICPA CPA-Auditing Exam - Topic 2 Question 68 Discussion

Actual exam question for AICPA's CPA-Auditing exam
Question #: 68
Topic #: 2
[All CPA-Auditing Questions]

An accountant has been asked to issue a review report on the balance sheet of a nonissuer but not to report on the other basic financial statements. The accountant may not do so:

Show Suggested Answer Hide Answer
Suggested Answer: A

Choice 'a' is correct. An auditor should obtain management's written assertion about the effectiveness of the entity's internal control.

Choice 'b' is incorrect. The accountant should disclaim (not qualify) an opinion on management's assertions that the cost of correcting weaknesses exceeds the benefits.

Choice 'c' is incorrect. The accountant has no responsibility to evaluate the effect of subsequent events. In fact, the report on an entity's internal control specifically states that projections of the internal control evaluation to future periods is inappropriate.

Choice 'd' is incorrect. The accountant does provide an opinion (and not a disclaimer) on the effective operation of internal control.


by Bernardine at Apr 03, 2023, 03:56 PM

Limited Time Offer

25%

Off

Get Premium CPA-Auditing Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Jaclyn
8 months ago
D makes sense too, scope matters a lot!
upvoted 0 times
...
Dorothy
8 months ago
C could also be a factor if GAAP issues pop up.
upvoted 0 times
...
Shannan
9 months ago
Wait, are we sure about that? Seems odd to skip other statements.
upvoted 0 times
...
Janessa
9 months ago
Totally agree, can't just look at one part!
upvoted 0 times
...
Rodolfo
9 months ago
B is the right answer! Incomplete review for sure.
upvoted 0 times
...
Stevie
9 months ago
I feel like option A is too strict; I don't recall ethical standards preventing a review of just one statement.
upvoted 0 times
...
Alana
9 months ago
I think I saw a practice question similar to this, and it emphasized the importance of GAAP compliance, which might relate to option C.
upvoted 0 times
...
Tien
9 months ago
I'm not entirely sure, but I feel like option D could be relevant if the accountant's work is limited.
upvoted 0 times
...
Zachary
9 months ago
I remember discussing how a review report should cover all financial statements, so I think option B makes sense.
upvoted 0 times
...
Ollie
9 months ago
I feel pretty confident about this one. Provider Search and Intelligent Appointment Management are the two capabilities that will best meet the requirements described in the question. The other options don't seem as directly relevant to the specific needs of the call center agent.
upvoted 0 times
...
Anika
9 months ago
Whew, this is a lot to consider. I'll need to really focus on understanding the relationship between the different systems and how they need to work together. Enabling SSO is a must, but I'm not sure about the other steps.
upvoted 0 times
...
Erasmo
10 months ago
Okay, I remember learning about the TCSEC divisions in class. I think Division B is the one based on MAC, but I'll review my material to confirm.
upvoted 0 times
...
Teddy
1 year ago
Ha! Imagine the accountant trying to hide a material GAAP departure in the balance sheet. That's just asking for trouble.
upvoted 0 times
Josefa
1 year ago
C) If the review of the balance sheet discloses material departures from GAAP.
upvoted 0 times
...
Slyvia
1 year ago
B) Because compliance with this request would result in an incomplete review.
upvoted 0 times
...
Earleen
1 year ago
A) Because compliance with this request would result in a violation of the ethical standards of the profession.
upvoted 0 times
...
...
Gail
1 year ago
I'm not sure about this one. Couldn't the accountant just disclose the limitations in the report and still issue a review on the balance sheet?
upvoted 0 times
Evangelina
1 year ago
C) If the review of the balance sheet discloses material departures from GAAP.
upvoted 0 times
...
Bobbie
1 year ago
B) Because compliance with this request would result in an incomplete review.
upvoted 0 times
...
Joanne
1 year ago
A) Because compliance with this request would result in a violation of the ethical standards of the profession.
upvoted 0 times
...
...
Isadora
1 year ago
I agree with Linn. Reviewing only part of the financial statements is not enough to provide a proper review report.
upvoted 0 times
...
Shaun
1 year ago
But what if the review of the balance sheet shows material departures from GAAP? Shouldn't the accountant report that?
upvoted 0 times
...
Gerald
1 year ago
I agree with Charlene. It's important to uphold ethical standards in the profession.
upvoted 0 times
...
Linn
1 year ago
I think option B is the correct answer. Reviewing only the balance sheet and not the other financial statements would result in an incomplete review.
upvoted 0 times
Louvenia
1 year ago
B) Because compliance with this request would result in an incomplete review.
upvoted 0 times
...
Iola
1 year ago
A) Because compliance with this request would result in a violation of the ethical standards of the profession.
upvoted 0 times
...
...
Charlene
1 year ago
I think the accountant should not issue the review report if it would violate ethical standards.
upvoted 0 times
...

Save Cancel