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NEW QUESTION: 1
This question consists of an item pertaining to possible deficiencies in an accountant's review report.
Jordan & Stone, CPAs, audited the financial statements of Tech Co., a nonissuer, for the year ended
December 31, 20X1, and expressed an unqualified opinion. For the year ended December 31, 20X2, Tech
issued comparative financial statements. Jordan & Stone reviewed Tech's 20X2 financial statements and
Kent, an assistant on the engagement, drafted the accountants' review report below. Land, the
engagement supervisor, decided not to reissue the prior year's auditors' report, but instructed Kent to
include a separate paragraph in the current year's review report describing the responsibility assumed for
the prior year's audited financial statements. This is an appropriate reporting procedure. Land reviewed
Kent's draft and indicated in the Supervisor's Review Notes below that there were several deficiencies in
Kent's draft.
Accountant's Review Report
We have reviewed and audited the accompanying balance sheets of Tech Co. as of December 31, 20X2
and 20X1, and the related statements of income, retained earnings, and cash flows for the years then
ended, in accordance with Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants and generally accepted auditing standards. All
information included in these financial statements is the representation of the management of Tech Co. A
review consists principally of inquiries of company personnel and analytical procedures applied to financial
data. It is substantially less in scope than an audit in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding the financial statements taken
as a whole. Based on our review, we are not aware of any material modifications that should be made to
the accompanying financial statements. Because of the inherent limitations of a review engagement, this
report is intended for the information of management and should not be used for any other purpose. The
financial statements for the year ended December 31, 20X1, were audited by us and our report was dated
March 2, 20X2. We have no responsibility for updating that report for events and circumstances occurring
after that date.
Jordan and Stone, CPAs
March 1, 20X3
Supervisor's Review Notes
There should be no reference to "updating the prior year's auditor's report for events and circumstances
occurring after that date" in the fourth (separate) paragraph.
A. Incorrect
B. Correct
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Correct. The report should not state that the auditors have no responsibility for updating the prior year's
audit report for events and circumstances that occurred after that date. This type of comment is included in
a report on prospective financial statements, not in a report on the financial statements of a nonissuer.
Planning and Supervision
NEW QUESTION: 2
A. Option B
B. Option D
C. Option A
D. Option C
Answer: B
Explanation:
Reference:http://www01.ibm.com/support/knowledgecenter/SSAW57_7.0.0/com.ibm.websphere.installation.soafepnd.doc/info/ae/ae/tins_installfp_dist.html?lang=en(Shared resources directory)
NEW QUESTION: 3
Cost Accounting captures costed transactions that are picked up by the cost processor for all of the following but one - which is NOT, and picked up by the cost processor?
A. Payable invoices are interfaced from Fusion Payables
B. Resource transactions are interfaced directly from Manufacturing
C. Invoices and revenue are interfaced from Fusion Receivables
D. Period close adjusting journal entries for payroll
E. Shipping, receiving, and inventory transactions from manufacturing
Answer: B