Which of the Following Procedures Does an Accountant Ordinarily Perform

question 86

Multiple Choice

Which of the following procedures does an accountant ordinarily perform in a compilation engagement of a nonpublic entity?

• A) Reading the financial statements to consider whether they are free of obvious mistakes in the application of accounting principles.
• B) Obtaining written representations from management indicating that the compiled financial statements will not be used to obtain credit.
• C) Making inquiries of management concerning actions taken at meetings of the stockholders and the board of directors.
• D) Applying analytical procedures designed to corroborate management's assertions that are embodied in the financial statement components.

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Definitions:

General Partner

A member of a partnership who has unlimited personal liability for the debts of the business and takes part in the management of the partnership.

Learned Helplessness

A condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed.

Aversive Stimuli

Unpleasant or negative stimuli that an individual seeks to avoid or escape.

Shuttle-Box Situation

An experimental setup in animal learning studies where an animal is trained to avoid an aversive stimulus by moving from one compartment to another.