During an Engagement to Review the Financial Statements of a Nonpublic

question 32

Multiple Choice

During an engagement to review the financial statements of a nonpublic entity, an accountant becomes aware of a material departure from GAAP. If the accountant decides to modify the standard review report because management will not revise the financial statements, the accountant should:

• A)express negative assurance on the accounting principles that do not conform with GAAP.
• B)disclose the departure from GAAP in a separate paragraph of the report.
• C)issue an adverse or an "except for" qualified opinion, depending on materiality.
• D)express positive assurance on the accounting principles that conform with GAAP.

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Definitions:

Anxiety

A mental health disorder characterized by feelings of worry, anxiety, or fear that are strong enough to interfere with one’s daily activities.

Unconscious

An area of the mind not accessible to conscious thought, though it impacts emotions and actions.

Conscious

Being aware of and responsive to one's surroundings; involves the awareness of thoughts, feelings, and sensations.

Freud

A reference to Sigmund Freud, an Austrian neurologist known for founding psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.