Reports on Application of Requirements of Framework

Question 1

Define hypothetical transaction?

Answer 1

A transaction or financial statement reporting issue that does not involve facts or circumstances of a specific entity

Question 2

Define specific transaction:

Answer 2

A complete or proposed transaction or group of related transactions or a financial reporting issue involving facts or circumstances of a specific entity

Question 3

Define reporting accountant

Answer 3

An accountant who prepares a written report or provides oral advice o the application of the requirement of an financial reporting framework

Question 4

A reporting accountant can accept an engagement involving a hypothetical transaction?

Answer 4

FALSE

Question 5

During planning and performance stage, what should the reporting accountant do?

Answer 5

• obtain an understanding of the transaction or conditions involved
• Review the rules related to GAAP or other applicable reporting framework
• Request management to authorize that the continuing accountant respond fully to any questions the reporting accountant might have

Question 6

When is the reporting accountant NOT required to talk with the continuing accountant

Answer 6

1) Reporting accountant is involved related to a specific transaction
2) Reporting accountant is engaged to provide recurring accounting advice and does not believe a “second opinion” is being requested

Question 7

What should be included in the written report?

Answer 7

1) Describe engagement
2) identification of the entity, description of any transactions
3) Statements describing the application of the requirements of applicable financial reporting
3) Management is responsible for the proper accounting treatment and should consult with continuing accountant
4) Resection that the report is intended solely for specified parties