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Flashcards in Deck 3 Deck (19):
1

SSARS Applicability

An accountant who is engaged to prepare, compile, or review unaudited financial statements of a nonuser should comply with SSARS

2

Three-Party Relationship

Preparation, compilation, and review engagements involve three parties: management, an accountant in the practice of public accounting. and the intended users of the financial statements

3

If an accountant prepares the financial statements, accountant must issue what kind of report/opinion

Issue a disclaimer or indicate that no assurance is provided

4

Nonissuer

Private company/non public

5

Issuer

Public company

6

Which report doesn't have any separate paragraphs or headings?

Standard compilation report

7

Compiled financial statements that omit GAAP disclosures are acceptable if the:

- Financial statements are otherwise in conformity with GAAP
- Reason for omission was not to deceive the user
- Compilation report warns the user of missing disclosures

8

Which level of service (prepare, compile, or review) provides the highest level of service

A review

9

What does it mean to have an understanding with the client?

Accountant will receive an engagement letter

10

Engagement letter

A written communication documenting the understanding between an accountant and his or her client

11

SOAP (review report)

Summary of adjustments past

12

RAM (review report)

Reviewing, analytical procedures, making inquiries

13

Predecessor accountant's report reissued unchanged...what procedures are performed?

- read the statements and report of current period
- compare the prior period statements with those issued previously and currently
- obtain a letter form the successor accountants

14

When audited financial statements are presented in comparative form with unaudited financial statements from a prior year, the auditor should:

- Reissue the audit report on the unaudited financial statements
OR
- The report on the audited financial statements should include a separate paragraph describing the responsibility assumed for the unaudited financial statements

15

Before reissuing a compilation report on the financial statements of a nonissuer for the prior year, the predecessor accountant is required to:

Compare the prior year's financial statements with those of the current year

16

When a CPA firm decides to take responsibility for another firm's audit work, the CPA firm should:

Review the other firm's audit work papers and reperform a subset of audit testing to validate the firm's conclusions

17

A review of interim financial statements of a publicly held company is conducted in accordance with what standards?

PCAOB standards only (not SSARS)

18

Securities Act of 1933

Imposes certain responsibilities on an auditor who prepares a report that is used in connection with a registration statement

19

Comfort letter

Letter from the CPA to the names underwriter and/or certain other requesting parties just before the registration of the client's securities;
Does not update the opinion