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Exam AUD topic 1 question 209 discussion

Actual exam question from AICPA's AUD
Question #: 209
Topic #: 1
[All AUD Questions]

Statements on Standards for Accounting and Review Services (SSARS) require an accountant to report when the accountant has:

  • A. Typed client-prepared financial statements, without modification, as an accommodation to the client.
  • B. Provided a client with a financial statement format that does not include dollar amounts, to be used by the client in preparing financial statements.
  • C. Proposed correcting journal entries to be recorded by the client that change client-prepared financial statements.
  • D. Prepared, through the use of computer software, financial statements that are in conformity with a comprehensive basis of accounting other than GAAP, and which are expected to be used by a third party.
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Suggested Answer: D 🗳️
Choice "D" is correct. SSARS apply when an accountant "submits" financial statements. Submission is defined as presenting financial statements to a client or third party that the accountant has prepared, either manually or through use of computer software. Preparing financial statements that are in conformity with another comprehensive basis of accounting constitutes a submission of financial statements under SSARS. If the financial statements are expected to be used by a third party, SSARS would require the accountant to report.
Choice "A" is incorrect. Typing or reproducing client-prepared financial statements, without modification, as an accommodation to a client does not constitute submission of financial statements because the accountant has not prepared those statements.
Choice "B" is incorrect. Providing a client with a financial statement format does not constitute a submission of financial statements (the accountant is not preparing the financial statements) and therefore, this does not fall within the guidelines of SSARS.
Choice "C" is incorrect. Proposing correcting journal entries does not constitute submission of financial statements because the client will be the one recording the entries.
by gemazyni at April 5, 2025, 4:19 p.m.

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