Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 19, Problem 29FOQ
To determine
Identify the action of the management concerning interim quarterly financial statements.
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When accountants agree to perform a compilation or review of unaudited financial statements, the best way to avoid clients’ misunderstanding the nature of the work is to describeit completely ina. An engagement letter.b. The auditors’ opinion.c. A report to the clients’ board of directors at the close of the engagement.d. A management letter to the board of directors’ audit committee.
During an audit of an entity’s stockholders’ equity accounts, the auditor determines whether there are restrictions on retained earnings resulting from loans, agreements, or state law. This audit procedure most likely is intended to verify management’s assertion ofa. Existence or occurrence.b. Completeness.c. Valuation or allocation.d. Presentation and disclosure.
Both the GASB and the FASB require entities to include a management discussion and analysis in the financial
reports.
True or False
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False
Chapter 19 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 19 - Prob. 1RQCh. 19 - Prob. 2RQCh. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Prob. 10RQ
Ch. 19 - Prob. 11RQCh. 19 - Prob. 12RQCh. 19 - Prob. 13RQCh. 19 - What are the types of procedures performed during...Ch. 19 - Prob. 15RQCh. 19 - Prob. 16RQCh. 19 - Prob. 17RQCh. 19 - What procedures are required when a CPA performs a...Ch. 19 - Prob. 19RQCh. 19 - What should the accountants do if they discover...Ch. 19 - Prob. 21RQCh. 19 - Prob. 22RQCh. 19 - Prob. 23QRACh. 19 - Prob. 24QRACh. 19 - Prob. 25QRACh. 19 - Prob. 26QRACh. 19 - In connection with a public offering of...Ch. 19 - Prob. 28QRACh. 19 - Prob. 29AOQCh. 19 - Prob. 29BOQCh. 19 - Prob. 29COQCh. 19 - Prob. 29DOQCh. 19 - Prob. 29EOQCh. 19 - Prob. 29FOQCh. 19 - Prob. 29GOQCh. 19 - Prob. 29HOQCh. 19 - Prob. 29IOQCh. 19 - Prob. 29JOQCh. 19 - Prob. 29KOQCh. 19 - Prob. 29LOQCh. 19 - Prob. 30OQCh. 19 - Prob. 31OQCh. 19 - Prob. 32OQCh. 19 - Prob. 33OQCh. 19 - Prob. 34OQCh. 19 - Jiffy Clerical Services is a company that...Ch. 19 - Prob. 36PCh. 19 - Prob. 37AITCCh. 19 - Prob. 37BITCCh. 19 - Prob. 37CITCCh. 19 - Prob. 37DITCCh. 19 - Prob. 38RDC
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- What is the main purpose of information presented in notes to the financial statements? • To provide disclosures required by generally accepted accounting principles. To correct improper presentation in the financial statements. To provide recognition of amounts not included in the totals of the financial statements. To present management's responses to auditor comments.arrow_forwardWhich of the following statement is not related to role of audit committee? Approve remuneration and terms of engagement of the external auditor Monitor and review the effectiveness of the company’s internal control Monitor the integrity of the company’s financial statements To prepare the financial statement of the company in timearrow_forwardDuring a review of a nonissuer’s financial statements, accountants are required to make certaininquiries of management. Which of the following inquiries is not required by the SSARS?a. The basis for the preparation of financial statements.b. Internal control deficiencies.c. Significant transactions occurring near the end of the reporting period.d. Material subsequent eventsarrow_forward
- Management assertions are A) stated in the footnotes to the financial statements. B) implied or expressed representations about the accounts in the financial statements. C) explicitly expressed representations about the financial statements. D) provided to the auditor in the engagement letter but are not disclosed on the financial statements.arrow_forwardWhich of the following would not be considered confidential information obtained in thecourse of an engagement for which the client’s consent would be needed for disclosure?a. Information about whether a consulting client has paid the CPA’s fees on time.b. The actuarial assumptions used by a tax client in calculating pension expense.c. Management’s strategic plan for next year’s labor negotiations.d. Information about material contingent liabilities relevant for audited financial statementsarrow_forwardWhich of the following is correct about the General Purpose Financial Statements? O a. General-purpose financial statements are issued to aid auditors O b. General-purpose financial statements are issued to aid the management of the entity in their decision making process Oc. General-purpose financial statements are issued throughout the year to aid investors and creditors in their decision making process Od. General-purpose financial statements are issued at financial year end to aid the employees of the entity in their decision making processarrow_forward
- In addition to the preparation of financial statements, it is also the responsibility of those charged with governance to: * Identify the financial reporting framework to be used in the preparation and presentation of their financial report. Establish and maintain internal controls that are effective in preventing and detecting material misstatements Selecting and applying appropriate O accounting policies and making reasonable accounting estimates All of the above.arrow_forward16. What is the purpose of information presented in notes to financial statements? a. To present management's responses to auditor comments b. To correct improper presentation in the financial statements c. To provide disclosures required by generally accepted accounting principles d. To provide recognition of amounts not included in the total of the financial statements 17. Proper application of accounting principles is most dependent upon a. Existence of specific guidelines b. Oversight of regulatory bodies c. External audit function d. Professional judgment of the accountant 18. Which of the following is not a correct variation of the basic accounting equation? a. Asset = Liabilities +Equity b. Asset - Liabilities = Equity c. Asset - Equity = Liabilities d. Asset + Liabilities = Equity 19. Entity A's total liabilities are P50M, while its total equity is P10. Entity A's total assets are a. P60M b. P50M c. P40M d. Any of these 20. What is the effect on an entity's financial…arrow_forwardEvery annual report of a public company includes an extensive discussion and analysis provided by thecompany’s management. Specifically, which aspects of the company must this discussion address? Isn’tmanagement’s perspective too biased to be of use to investors and creditors?arrow_forward
- tion As per ISA 700, Which of the following is NOT a specific evaluation while forming an opinion on financial statements? Evaluate whether the financial statements are prepared in all material respects, in accordance with the applicable financial reporting framework. The Accounting policies selected and applied are consistent with financial reporting framework. IThe management's accounting estimates are reasonable and terminology used in the financial statements are appropriate. The financial statements are providing the sufficient disclosures to enable users to understand. While evaluating the management's assessment of the entity as a going concern, the auditor shall consider same time period as covered by management in its assessment, such period shall: At least twelve months from the date of financial statements tion Auditing and Contpdf 10:16 ya EN 餅手 ilarrow_forwardWhich of the following statements are True? a) The financial statements are management's responsibility. b) Management is responsible for adopting sound accounting policies and establishing and maintaining internal control c) The fair presentation of financial statements in conformity with applicable financial reporting framework is an explicit and integral part of auditor's responsibility. Only a) and b) All a) , b) and c) Only b) and c) Only a)arrow_forwardWhich of the following is NOT a major component of the Sarbanes-Oxley Act? Executive responsibility for accurate financial reporting. Accounting regulation. Mandating external financial audits for all companies. Formation of an audit committee.arrow_forward
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