Before issuing a report on the compilation offinancial statements of a non-public entity,the accountant should:a. Apply analytical procedures to selectedfinancial data to discover any materialmisstatements.b. Corroborate at least a sample of theassertions management has embodied in thefinancialstatements.c. Inquire of the client's personnel whetherthe financial statements omit substantially alldisclosures.d. Read the financial statements to considerwhether the financial statements are freefrom obvious material errors.

Explanation of Assurance Services:Assurance services are professional services provided by certified…

Answered: Before issuing a report on the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Analytical procedures are generally used to produce evidence froma. Confirmations mailed directly to the auditors by client customers.b. Physical observation of inventories.c. Relationships among current financial balances and prior balances, forecasts, and nonfinancial data.d. Detailed examination of external, external-internal, and internal documents.
List A represents the types of opinions the auditor ordinarily would issue and List B represents the report modifications and paragraph modifications that would be necessary. For each situation, select the best answer for the type of opinion and modifications the auditor would normally select. Assume all amounts are material to the financial statements and may or may not be pervasive. If different reports might be required, list them both. In auditing the long-term investments account, an auditor is unable to obtain audited financial statements for an investee located in a foreign country. The auditor concludes that sufficient competent evidential matter regarding this investment cannot be obtained. Due to recurring operating losses and working capital deficiencies, an auditor has substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time. However, the financial statement disclosures concerning these matters are adequate. A…
Analytical procedures are one of many financial audit processes which help an auditor understand the client's business and changes in the business. The analytical procedures may be classified as being primarily: Select one: a. Reasonable tests. b. Detailed tests of balances. c. Substantive tests. d. Tests of control.
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Management's assertions in the financial statements are of relevance to the audit process because a. they are the procedures that will be performed by the audit team. b. they are utilized by auditors in developing proper tests and procedures c. they are direct evidence that management has prepared financial statements in accordance with GAAS. d. they relate more to the audit while the financial statenent belong to the author.
Tests of controls in a GAAS audit are required fora. Obtaining evidence about the financial statement assertions.b. Accomplishing control over the occurrence of recorded transactions.c. Applying analytical procedures to financial statement balances.d. Obtaining evidence about the operating effectiveness of client control activities.
(i) To obtain absolute assurance about whether the financial statements have no fraud or error, thereby enabling the auditor to ensure the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework; and(ii) To prepare the financial statements, and communicate as required by the HKASS.Q) Is the assurance level correct? If yes, what should the auditors do to achieve it? If no, state the correct assurance level and the reasons why only such level is achievable for audit purpose.

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