During a Review of the Financial Statements of a Nonpublic

question 2

Multiple Choice

During a review of the financial statements of a nonpublic entity,the CPA finds that the financial statements contain a material departure from generally accepted accounting principles.If management refuses to correct the financial statement presentations,the CPA should:

• A)Disclose the departure in a separate paragraph of the report.
• B)Issue an adverse opinion.
• C)Attach a note explaining the effects of the departure.
• D)Issue a compilation report.

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Definitions:

Patent Account

An accounting record that reflects the value of patents a company owns, including costs associated with obtaining and protecting these intellectual properties.

Unamortized Patent

The portion of a patent's purchase cost that has not yet been expensed in the company's financial statements over the patent's useful life.

Investment Account Balance

The total value of all the securities and cash in an investment account at any given time, reflecting purchases, sales, gains, and losses.