When providing limited assurance that the financial statements of a nonissuer require no material modifications to be in accordance with generally accepted accounting principles, the accountant should:
A.
Assess the risk that a material misstatement could occur in a financial statement assertion.
B.
Confirm with the entity's lawyer that material loss contingencies are disclosed.
C.
Understand the accounting principles of the industry in which the entity operates.
D.
Develop audit programs to determine whether the entity's financial statements are fairly presented.
Suggested Answer:C🗳️
Choice "C" is correct. In a review engagement, the auditor should possess a level of knowledge of the accounting principles and practices of the industry in which the entity operates. This will provide, through the performance of inquiry and analytical procedures, a reasonable basis for expressing limited assurance that there are no material modifications that should be made to the financial statements to be in conformity with generally accepted accounting principles. Choice "A" is incorrect. Assessing the risk that a material misstatement could occur in a financial statement assertion is an audit procedure, not a review procedure. Choice "B" is incorrect. Confirmation with the entity's attorney is an audit procedure, not a review procedure. Choice "D" is incorrect. Development of audit programs are part of an audit engagement, not a review procedure.
Currently there are no comments in this discussion, be the first to comment!
This section is not available anymore. Please use the main Exam Page.AUD Exam Questions
Log in to ExamTopics
Sign in:
Community vote distribution
A (35%)
C (25%)
B (20%)
Other
Most Voted
A voting comment increases the vote count for the chosen answer by one.
Upvoting a comment with a selected answer will also increase the vote count towards that answer by one.
So if you see a comment that you already agree with, you can upvote it instead of posting a new comment.
Comments