Which of the Following Procedures Would Not Be Performed in a Review

question 40

Multiple Choice

Which of the following procedures would not be performed in a review of financial statements of a nonpublic company?

• A)Inquire about the accounting system and bookkeeping procedures.
• B)Perform analytical procedures to identify relationships and individual items that appear to be unusual.
• C)Obtain an attorney's letter regarding litigation and unasserted claims.
• D)Study the financial statements for indications that they conform to generally accepted accounting principles.

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Definitions:

Expected Return

Expected return is the anticipated profit or loss from an investment, based on the potential outcomes and their probabilities, often used to evaluate investment choices.

Risky Asset

An asset that carries a degree of risk that the value or return could be higher or lower than expected.

Future

Represents the time period that has not occurred yet, often used in the context of predicting economic, financial, or technological developments.

Systematic Risk

The inherent risk that affects the overall market, not diversified away by holding a broad portfolio.