Compiled Financial Statements of a Nonpublic Entity Should Be Accompanied

question 20

Multiple Choice

Compiled financial statements of a nonpublic entity should be accompanied by a report stating that

• A)the scope of the accountant's procedures has not been restricted in testing the financial information that is the representation of management.
• B)the accountant assessed the accounting principles used and significant estimates made by management.
• C)the accountant does not express an opinion or any other form of assurance on the financial statements.
• D)a compilation consists primarily of inquiries of entity personnel and analytical procedures applied to financial data.

---

Definitions:

Actual Results

Actual results refer to the final outcomes or data obtained after completing a process or experiment, measured against predetermined objectives or expectations.

Variable Overhead Efficiency Variance

The difference between the actual and standard cost of variable overhead based on the efficient use of production resources.

Machine-Hours

A measure of production output or activity based on the total hours machines are operated in the manufacturing process.

Overhead Rate

A calculation used to allocate indirect costs to products or services, typically expressed as a rate per unit of activity (e.g., labor hours or machine hours).