During a Review of the Financial Statements of a Nonpublic

question 72

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 problem, the CPA should:

• A)disclose the departure in a separate paragraph of the report.
• B)issue an adverse opinion.
• C)attach a footnote explaining the effects of the departure.
• D)issue a compilation report.

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Definitions:

Structural Change

Alterations or modifications in the physical or organizational structure of something.

Mother-Child Coalition

A concept emphasizing the collaboration and bonding between a mother and her child, often used in the context of advocacy or support.

Desensitization

The process by which someone is made less likely to feel shock or distress at scenes of cruelty, violence, or suffering by overexposure to such stimuli.

Alcoholics Anonymous (AA)

A self-help organization and support group for people who struggle with alcoholism.