M6 Interim Reviews

Question 1

What is the objective of interim financial information

Answer 1

to provide the accountant with a basis for reporting whether material modifications should be made to conform with GAAP

Question 2

What are 2 differences between a review of a public entity’s interim financials and a nonissuer’s interim financials

Answer 2

Public - Requires communication with the predecessor auditor & an evaluation of internal control
Nonissuer - Does not require either.

Neither type of review requires inquiry of the client’s attorney regarding litigation, claims, and assessments, although it may be appropriate in certain circumstances.

Question 3

If a client departs from GAAP and does not accept the CPA’s suggestions

Answer 3

the CPA should add a paragraph modifying the disclaimer to describe the nature and effect of the departure from GAAP.

Question 4

If a report on a review of interim financial information is presented in a registration statement

Answer 4

the prospectus should include a statement that the report is not a “report” or “part” of the registration statement

Question 5

Interim FS should be marked as

Answer 5

Unaudited

Question 6

When planning a review of an audit client’s interim financial statements, which of the following procedures should the accountant perform to update the accountant’s knowledge about the entity’s business and its system of internal control?

Answer 6

Consider the results of audit procedures performed with respect to the current-year’s financial statements.