Auditing and Assurance Services (16th Edition)

16th Edition

ISBN: 9780134065823

Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan

Publisher: PEARSON

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Textbook Question

Chapter 25, Problem 25DQP

Jennifer Branson is a new staff auditor on the audit engagement of Greenville Light & Sound, which is a publicly traded company with a calendar year-end. The engagement team has completed its review of the third-quarter financial statements, and the firm has been asked to issue a review report on those statements. As the senior auditor on the engagement, you asked Jennifer to draft the firm’s report for your review. Here’s what she provided you:

We have examined the accompanying balance sheet of Greenville Light & Sound as of September 30, 2016, and the related statement of operations for the three quarterly periods then ended. A review includes primarily applying analytical procedures to management’s financial data, making inquiries of management, and testing internal controls over financial reporting. A review is substantially less in scope than an audit. These financial statements are the responsibility of the company’s management.

We conducted our review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain assurance that there are no misstatements in the financial statements in order to express our opinion on them.

Based on our review, it is our opinion that the financial statements are in accordance with accounting standards generally accepted by the Securities and Exchange Commission for the quarter ended September 30, 2016.

What changes are needed to the report draft provided by Jennifer?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 25, Problem 24DQP

Chapter 25, Problem 26DQP

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Chapter 25 Solutions

Auditing and Assurance Services (16th Edition)

Ch. 25 - Prob. 1RQ Ch. 25 - Prob. 2RQ Ch. 25 - Prob. 3RQ Ch. 25 - Prob. 4RQ Ch. 25 - Prob. 5RQ Ch. 25 - Prob. 6RQ Ch. 25 - Prob. 7RQ Ch. 25 - Prob. 8RQ Ch. 25 - Prob. 9RQ Ch. 25 - You have been asked to provide assurance on...

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Solution Summary: The author states the changes that are required to report draft provided by Person JB. The word "examined" should be replaced with "Review" in the first sentence.

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