[Anonymous]

Financial statements of a nonissuer that have been reviewed by an accountant should be accompanied by a report stating that a review:

A.

provides only limited assurance that the financial statements are fairly presented.

B.

includes examining, on a test basis, information that is the representation of management.

Correct C.

include primarily applying analytical procedures to management’s financial data and making inquiries of company management.

D.

does not contemplate obtaining corroborating audit evidence or applying certain other procedures ordinarily performed during an audit.

---

The answer is C. But in the language of the review report, it includes this statement, “’Those standards require me (us) to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements.’ It is issued in relation to a review of financial statements (AR 90.28) and in certain reports on a review of interim financial information.” So wouldn’t A also be a correct answer?

[Anonymous]

I'm going to say that C is the only correct answer because you did not perform any actual tests. Analyticals are not the same as tracing and vouching.

[Anonymous]

In my opinion the word examine makes B incorrect. Examine is associated with Audits. And the actual definition of the word examine is to inspect something in Detail; investigate thoroughly. Which makes this answer incorrect.

[Anonymous]

Sorry, I just realized I meant to type A instead of B. My mistake. I meant to say that since the answer explanation includes the language for limited assurance, I am just wondering if the limited assurance option, A, should have also been the correct answer.

[Anonymous]

The key word in the problem is “Review”.

[Anonymous]

B looks very similar to the verbiage used in the opinion for agreed-upon-procedures.

C is correct because that is what a review is- inquiries and analytical procedures.

Audit firms won't go any further than inquiry & analytical procedures in a review. The minute you start testing things, you can open yourself up to the full liability associated with an audit.

[tami3492]

Maybe it has to do with that a review provides limited assurance that there are no material misstatements, whereas A states limited assurance that the FS are fairly presented.

FAR 7/8/14 - 88 - Becker live course
REG 10/14/14 - 82 - Becker live course, Ninja notes and audio
BEC 11/25/14 - 88 - Becker live course, Ninja audio, Wiley book for extra questions
AUD 2/3/15 - 94 - Becker self study, Ninja audio, Wiley book for extra questions

[Anonymous]

^^^

“'Those standards require me (us) to perform procedures to obtain limited assurance that there are ***no material modifications that should be made to the financial statements.***”

vs.

“A. provides only limited assurance that the financial statements are fairly presented.”

[Kimboroni]

This is a perfect example of how tricky audit is– the exact language must be used, rather than being kinda/sorta the same thing.

AUD 84 (1/9/14-Wiley books/TB + free materials)
FAR 83 (5/21/14-the above + NINJA 10 Pt Combo Lite)
REG 84 (7/9/14-Wiley books/TB + NINJA Audio/FC/Notes)
BEC 76 (10/5/14-Wiley books/TB + NINJA Audio/FC)

Disclaimer: My ninja avatar is not meant to imply that I have any affiliation with this site other than being a forum member. That's a pic of a T-shirt that my daughter gave me for my birthday. 🙂

[Tncincy]

when there are two correct answers you have to pick the best answer. Read it again.

It begins with a 75
Been here too long as a cheerleader.....time to pass

It begins with a 75
Been here too long as a cheerleader....ready to pass

[Author]

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