Prior to Commencing the Compilation of Financial Statements of a Nonpublic

question 56

Multiple Choice

Prior to commencing the compilation of financial statements of a nonpublic entity, the accountant should:

• A)perform analytical procedures sufficient to determine whether fluctuations among account balances appear reasonable.
• B)complete the preliminary phase of the study and evaluation of the entity's internal control.
• C)verify that the financial information supplied by the entity agrees with the books of original entry and supporting documentation.
• D)acquire a knowledge of any specialized accounting principles and practices used in the entity's industry.

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Definitions:

Overemphasize

To place too much emphasis on something, often at the expense of other important factors or issues.

Impartiality

The principle of being fair and unbiased, making decisions without favoritism or prejudice.

Moral Decision-Making

The process of determining the best course of action when faced with a dilemma that involves ethical principles or moral conduct.

Impartiality

The principle of not being biased, treating all parties equally without favoritism or discrimination.