Correct Answer for the Question – Which is the expression of an opinion regarding the financial statements taken as a whole. is given below
This question-consists of an item pertaining to possible deficiencies in an accountants review report. Jordan & Stone, CPAs, audited the financial statements of Tech Co., a nonissuer, for the year ended December 31, 20X1, and expressed an unqualified opinion. For the year ended December 31, 20X2, Tech issued comparative financial statements. Jordan & Stone reviewed Techs 20X2 financial statements and Kent, an assistant on the engagement, drafted the accountants review report below.Land, the engagement supervisor, decided not to reissue the prior years auditors report, but instructed Kent to include a separate paragraph in the current years review report describing the responsibility assumed for the prior years audited financial statements. This is an appropriate reporting procedure.Land reviewed Kents draft and indicated in the Supervisors Review Notes below that there were several deficiencies in Kents draft.Accountants Review ReportWe have reviewed and audited the accompanying balance sheets of Tech Co. as of December 31, 20X2 and 20X1, and the related statements of income, retained earnings, and cash flows for the years then ended, in accordance with Statements on Standards for Accounting and Review Services issued by theAmerican Institute of Certified Public Accountants and generally accepted auditing standards. All information included in these financial statements is the representation of the management of Tech Co.A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements. Because of the inherent limitations of a review engagement, this report is intended for the information of management and should not be used for any other purpose.The financial statements for the year ended December 31, 20X1, were audited by us and our report was dated March 2, 20X2. We have no responsibility for updating that report for events and circumstances occurring after that date.Jordan and Stone, CPAsMarch 1, 20X3Supervisors Review NotesThere should be no reference to the prior years audited financial statements in the first (introductory) paragraph.Correct. The auditors are issuing a review report this year and issued an audit opinion last year. A review report gives less assurance than an audit. The auditors should not make reference in the first paragraph to the fact that they audited last years financial statements even though they are being comparatively shown, because it may mislead the reader of the financial statements as to the auditors degree of assurance on this years financial statements.
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