One of the First Steps That Should Be Performed for a Review

question 4

Multiple Choice

One of the first steps that should be performed for a review of a nonpublic entity's financial statements is to

• A) read the financial statements.
• B) obtain knowledge of the accounting principles and practices of the client's industry.
• C) inquire whether management has omitted substantially all of the disclosures required by applicable accounting standards.
• D) apply analytical procedures to provide limited assurance that no material modifications should be made to the financial statements.

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Definitions:

Slides

Thin slices of material, typically glass, that are used to hold objects for examination under a microscope.

Recognition

The cognitive process of identifying a previously encountered or learned item, person, or situation.

Recall

The act of remembering or bringing back to memory previously learned information.

Encoding

The process by which information is transformed into a format that can be stored in the memory.