The Fact That a Client Has a Material Accounting Departure

question 35

Multiple Choice

The fact that a client has a material accounting departure for failure to follow ASPE would require the accountant to disclose that fact in a separate reservation paragraph when the accountant is performing

• A) a compilation.
• B) a review and an audit.
• C) either a compilation or a review.
• D) neither a compilation nor a review, only an audit.

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Definitions:

Par Value

The nominal value of a bond or stock as declared by the issuer, not always representing its current market price.

Journal Entries

Recorded transactions in the accounting books that track all financial activities of a business.

Common Stock

A type of security that represents ownership in a corporation, with holders usually having voting rights and a claim on profits in the form of dividends.

Stock Dividend

A dividend paid to shareholders in the form of additional shares of stock rather than cash.