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Content Type User Generated DescriptionIn addition to auditing public companies, accountants can provide services for nonpublic companies and services that do not require an annual external audit. You will demonstrate your understanding of these additional services that can be provided. Unformatted Attachment Preview Unit 9 Auditing assignment 1. Occasionally, public accounting firms are engaged to report on specified
elements, accounts and items of financial statements. • Discuss three types of report that may be provided for specified elements, accounts, and items of financial statements. • Why should reports on the application of agreed-upon procedures to information be restricted to specified users? 2. In connection with a public offering of first- mortgage bonds by Guizzettii corporation, the bond underwriter has asked Guizzetti’s CPA’s to furnish it with a comfort letter giving as much assurance as
possible on Guizzetti’s unaudited financial statements for the three months ended March 31. The CPA’s had expressed an unqualified opinion on Guizzetti’s financial statements for the year ended December 31, the preceding year; they also perfoemed a review of Guizzetti’s financial statements for the three months ended March 31. Nothing has come to their attention that would indicate that the March 31` statements are not properly presented. • • Explain what can be stated about the unaudited
financial statements in the letter. Discuss other matters that are typically included in comfort letters. Multiple Choices Qustions Select the best answer for each of the following and explain fully the reason fro your selection. 3. Which of the following is not typically performed when the auditors are performing a review of client financial statements? • • • • Analytical procedures applied to financial data. Inquires about significant subsequent events. Confirmation of accounts receivable.
Obtaining an understanding of accounting principles followed in the clients industry. 4. Which of the following must be obtained in a review of a non public company? Engagement letter A. Yes B . Yes C. NO D. NO Representation letter Yes NO YES NO 5. A CPA Who is not independent may perform which of the following services for non public company? Compilation Review A. YES B. YES C.NO D. NO YES NO YES NO 6. When performing a review of a non public company, which is least likely to be included in
auditor inquires of management member’s with resposibilty for financial and accounting matters? • • • • Subsequent events Significant journal entries and other adjustments. Communications with related parties. Unusual or complex situations affecting the financial statements. 7. The proper report by an auditor relating to summarize financial statements includes. • A statement about the type of opinion expressed in the prior year. • An adverse opinion. • An opinion on wether the summarized
information is fairly atated in all material respect in relation to the basic financial statements. • No Assurance of the information. 8. Corcerning interim quarterly financial statements, managements of public companies; • Must engage CPA’s to audit the statements. • Must engage CPA’s to review the statements. • May choose to engage CPA’s to review the statements. • May not engage CPA’s to become associated with the statements. 9. A proper completion report on financial statements that omit
note disclosures; • Includes an adverse opinion. • Includes a disclaimer of opinion on the accuracy of such note disclosures: • Indicates that management has omitted such information. • Indicates that note disclosures are not necessary for those not informed about such matters. 10. Which of the following forms of accountant association is least likely to result in issuance of an accountant’s report on financial statements or financial information? • Compilation • • • Review Preparation Agreed-
upon procedures 11.Which assertion is generally most difficult to attest to with respect to personal financial statements? • Existence and occurrence • Rights and obligations • Completeness • Valuation 12. Financial statements prepared following which of the following are most likely to be considered special- purpose financial reporting framework? • Generally accepted accounting principles. • International Financial reporting Standards • Financial reporting standards of a foreign nation • The
cash basis of accounting 13. In which of the following reports should a CPA not express negative (limited) assurance? • A standard compilation report on financial statements of an nonpublic entity. • A standard review report on interim financial statements of a public entity. • A standard review report on financial statements of a nonpublic entity • A comfort letter on financial information included in a registration statement filed with the Securities and Exchange Commision. 14. Comfort letter
to underwritters are normally signed by the: • • • • Independent auditor Underwitter Clients lawyer Chief executive officer Simulation Indicate wether a CPA may provide each of the following services, and wether independence, by placing a check in the appropriate box. Service May provide; Independence Is required May provide Independence Is Not Required May not Provide A. Provide an opinion on wether financial statements are prepared following the cash basis of accounting. B. Compile the
financial statements for the past year and issue a publicity available report. C. Apply certain agreed-upon procedures to accounts receivable for purposes of obtaining a loan, and express a summary of findings relating to those procedures. D. Review quarterly information And issue a report that includes Limited assurance. E. Perform an audit of the financial Statements on whether they are Prepared following generally Accepted accounting Priniciples. F. Prepare the financial statements for the
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accounting homework Hello all,I need help with accounting.I have cycled the questions I need you to answer. 22 questions. some of the question ... Hello all,I need help with accounting.I have cycled the questions I need you to answer. 22 questions. some of the questions have the other part in the next picture.1.JPG , 2.JPG , 3.JPG , 4.JPG , 5.JPG , 6.JPG , 7.JPG 8.JPG , 9.JPG , 10.JPG , 11.JPG , 12.JPG , 13.JPG 14.JPG , 15.JPG , 16.JPG , 17.JPG , 18.JPG , 19.JPG I NEED an A in this assignment!!!
Advanced Accoutning: Variable Interest Entitie, Intra-Entity Debt, Consolidated Discussion 6.2: Who Lost this $300,000? Several years ago, Penston Company purchased 90 percent of the outstanding ... Advanced Accoutning: Variable Interest Entitie, Intra-Entity Debt, Consolidated Discussion 6.2: Who Lost this $300,000? Several years ago, Penston Company purchased 90 percent of the outstanding shares of Swansan Corporation. Penston made the acquisition because Swansan produced a vital component used in Penston's manufacturing process. Penston wanted to ensure an adequate supply of this item at a reasonable price. The former owner, James Swansan, retained the remaining 10 percent of Swansan's stock and agreed to continue managing this organization. He was given responsibility for the subsidiary's daily manufacturing operations but not for any financial decisions. Swansan's takeover has proven to be a successful undertaking for Penston. The subsidiary has managed to supply all of the parent's inventory needs and distribute a variety of items to outside customers. At a recent meeting, Penston's president and the company's chief financial officer began discussing Swansan's debt position. The subsidiary had a debt-to-equity ratio that seemed unreasonably high considering the significant amount of cash flows being generated by both companies. Payment of the interest expense, especially on the subsidiary's outstanding bonds, was a major cost, one that the corporate officials hoped to reduce. However, the bond indenture specified that Swansan could retire this debt prior to maturity only by paying 107 percent of face value. This premium was considered prohibitive. Thus, to avoid contractual problems, Penston acquired a large portion of Swansan's liability on the open market for 101 percent of face value. Penston's purchase created an effective loss of $300,000 on the debt, the excess of the price over the book value of the debt, as reported on Swansan's books. Company accountants currently are computing the noncontrolling interest's share of consolidated net income to be reported for the current year. They are unsure about the impact of this $300,000 loss. The subsidiary's debt was retired, but officials of the parent company made the decision. Who lost this $300,000? Earn money selling your Study Documents For which of the following services is a CPA professional required to be independent?Independence is required of a CPA when performing: all attestation services. CPAs may provide bookkeeping services to their private company audit clients, but there are a number of conditions that must be met if the auditor is to maintain independence.
Which of the following is not typically performed when the auditors are performing a review?Which of the following is not typically performed when the auditors are performing a review of client financial statements? Confirmation of accounts receivable.
How does the review of a nonpublic company financial statements differ from an audit?The audit process provides the highest level of assurance; other common types of nonpublic financial statement engagements include reviews and compilations. A review provides only limited assurance as to whether the financial statements comply with GAAP, while compilations provide no such assurance.
Which of the following should not be included in an accountant's report based upon the compilation of an entity's financial statements?Which of the following should not be included in an accountant's standard report based upon the compilation of an entity's financial statements? A statement that the accountant does not express an opinion but expresses only limited assurance on the financial statements.
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A cpa who is not independent may perform which of the following services for a nonpublic company?
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