Which of the Following Describes How the Objective of a Review

question 849

Multiple Choice

Which of the following describes how the objective of a review of financial statements differs from the objective of a compilation engagement?

• A) The primary objective of a review engagement is to test the completeness of the financial statements prepared, but a compilation tests for reasonableness.
• B) The primary objective of a review engagement is to provide positive assurance that the financial statements are fairly presented, but a compilation provides no such assurance.
• C) In a review engagement, accountants provide limited assurance, but a compilation expresses no assurance.
• D) In a review engagement, accountants provide reasonable or positive assurance that the financial statements are fairly presented, but a compilation provides limited assurance.

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Definitions:

Low-SES

Referring to low socioeconomic status, which encompasses individuals or groups with limited income, education, and occupational prestige.

Permissive

A parental approach where there's minimal expectations combined with a high level of attentiveness.

Authoritative

Refers to an assertive and confident command of knowledge or the exercising of control, often associated with leaders or experts in a particular field.

Psychoanalysis

A therapeutic approach developed by Sigmund Freud that seeks to explore the unconscious mind's roles in shaping behaviors.