Management Discussion and Analysis

Question 1

Do auditors attest to MDA?

Answer 1

YES

Question 2

When are MDA applicable to attestation?

Answer 2

When they have been prepared according to SEC requirements

Question 3

T/F: For an auditor to attest to MD&A, the auditors must have audited the MOST RECENT F/S presented?

Answer 3

TRUE

Question 4

The AICPA permits examination and review engagements of MD&A?

Answer 4

TRUE

Question 5

What is the purpose on the engagement on MD&A?

Answer 5

Includes required by SEC

The historical amounts are accurately derived

Underlying information and assumptions provide reasonable basis for the disclosures provided in MD&A

Question 6

What does MD&A discuss?

Answer 6

Discussion on liquidity and capital resources

Changes in financial condition

Results of operations

Question 7

What is the purpose of the review of MD&A?

Answer 7

Negative assurance that there is a reason to believe that

• the presentation does NOT include the elements required
• the amounts are NOT accurately derived from financial information
• Underlying information does NOT provide a reasonable basis for the MD&A presentation

Question 8

What are the four assertions for MD&A?

Answer 8

1) Occurrence- the reported events occurred
2) Completeness- Description is complete
3) Consistency- Historical amounts accurately derived from the F/S
4) Presentation & Disclosure- Whether information in MD&A are properly classified, described, and disclosed