M5 Review Reports

Question 1

When should an accountant modify the review report?

Answer 1

if they become aware it does not include:

• description of special purpose framework
• significant accounting policies
• an description abt how the special purpose framework differs from GAAP

Question 2

Can emphasis of matter and other matter paragraphs be included in review report

Answer 2

yes

Question 3

What should be included in a review report that is prepared with a special purpose framework

Answer 3

• make reference to mgmt responsibility
• include emphasis of matter paragraph
• if prepared using a regulator or contractual basis of accounting include description of the purpose

Question 4

What should you do if you are doing a review and there is a doubt about ability for going concern?

Answer 4

• ask mgmt abt possible effects of going concern
• accountant should think about reasonableness of of mgmt conclusions and adequacy of disclosure
• if disclosures are inadequate then accountant should treat it as a departure from the framework

Question 5

If you are presenting on comparative statements all compiled or review reports what should you do

Answer 5

update report on the prior period and issue it as part of the current report

Question 6

If you are presenting on comparative financials and the current period is reviewed and the prior period compiled what should you do?

Answer 6

-report on prior periods should be updated
and
-issued as the last paragraph of the current periods report

Question 7

If you are presenting on comparative financials and the current period is compiled and the prior period is

Answer 7

• issue a compliation report and add a paragraph to the report on the current period statements
• reissue prior period report

Question 8

If you are presenting on comparative financials and current period is prepared and the prior period is reviewed or complied

Answer 8

no req to reference the prior period

Question 9

What happens if you discover a subsequent event when doing a review?

Answer 9

if it effects the previous report information then you should issue an other matters paragraph

Question 10

What should the predecessor auditor do if they are reissuing a report unchanged

Answer 10

• decide if their report is still appropriate
• obtain a letter of rep from new accountant
• do the following procedures:
• read the statements
• compare to prior periods
• obtain letter from sucessor accountants

Question 11

What happens if the preecesor auditors report is not reissued?

Answer 11

new cpa should:

• make reference to the report
• perform that level of service themselves