AICPA CPA-Auditing Exam - Topic 3 Question 116 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 116
Topic #: 3

Moore, CPA, has been asked to issue a review report on the balance sheet of Dover Co., a nonissuer.

Moore will not be reporting on Dover's statements of income, retained earnings, and cash flows. Moore may issue the review report provided the:

ABalance sheet is presented in a prescribed form of an industry trade association.

BScope of the inquiry and analytical procedures has not been restricted.

CBalance sheet is not to be used to obtain credit or distributed to creditors.

DSpecialized accounting principles and practices of Dover's industry are disclosed.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. An accountant may issue a review report on one financial statement, such as a balance sheet, and not on other related financial statements, if the scope of the accountant's inquiry and analytical procedures has not been restricted.

Choice 'a' is incorrect. The balance sheet need not be presented in a prescribed form of an industry trade association.

Choice 'c' is incorrect. There is no limitation on the use of a reviewed financial statement.

Choice 'd' is incorrect. Specialized accounting principles should be considered by the accountant when performing the review, but need not be disclosed.

by Elbert at Aug 18, 2025, 10:14 AM

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Casey

2 months ago

Not sure about that, seems risky if creditors can't see the full picture.

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Reita

2 months ago

I agree, the scope can't be restricted either!

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Frank

3 months ago

Wait, can a balance sheet really be used without income statements?

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India

3 months ago

I think it’s option B that matters most here.

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Rebeca

3 months ago

The balance sheet needs to follow industry standards for a review report.

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Dorethea

3 months ago

I’m leaning towards the option about specialized accounting principles being disclosed, but I’m not completely confident that’s the right requirement for a review report.

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Shannon

4 months ago

I feel like the answer might relate to whether the balance sheet is used for credit purposes. I think that was mentioned in one of our case studies.

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Devorah

4 months ago

I think we had a practice question about the requirements for review reports, and I recall that the balance sheet needs to be in a certain format, but I can't remember which one.

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Dante

4 months ago

I remember we discussed that a review report can be issued as long as the scope of the inquiry isn't restricted, but I'm not entirely sure if that applies here.

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Broderick

4 months ago

I'm a bit confused by this question. The options seem similar, and I'm not sure I fully understand the nuances between them. I'll need to re-read the question carefully and try to break down the requirements to determine the right answer.

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Martin

4 months ago

Okay, I've got this. The key is that the scope of the inquiry and analytical procedures cannot be restricted, so option B is the correct answer. I feel confident in this choice since it directly addresses the conditions for Moore to issue the review report as described in the question.

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Nina

4 months ago

Hmm, this is a tricky one. I'm not entirely sure about the requirements for issuing a review report on a nonissuer's balance sheet. I'll need to think through the key details and make sure I understand the differences between the options before selecting an answer.

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Talia

5 months ago

This question seems straightforward - I just need to identify the condition that allows Moore to issue a review report on Dover's balance sheet without reporting on the other financial statements. I'll carefully read through the options and select the one that best matches the information provided.

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Rolland

5 months ago

I see your point, Silvana. But I still think B is the best answer because it directly relates to the scope of the inquiry.

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Lawana

5 months ago

B) Scope of the inquiry and analytical procedures has not been restricted. This seems like the most logical choice to me. If the scope is limited, the review report would not be appropriate.

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