During a Review of the Financial Statements of a Nonpublic

question 74

Multiple Choice

During a review of the financial statements of a nonpublic entity, the CPA finds that the financial statements contain a material departure from generally accepted accounting principles. If management refuses to correct the problem, the CPA should

• A) Disclose the departure in a separate paragraph of the report.
• B) Issue an adverse opinion.
• C) Attach a footnote explaining the effects of the departure.
• D) Issue a compilation report.

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Definitions:

Endometrium

The inner lining of the uterus, which thickens during the menstrual cycle to prepare for potential pregnancy.

Uterus Lining

The inner layer of the uterus, known as the endometrium, which thickens during the menstrual cycle to prepare for potential implantation of an embryo.

Endothelium

The tissue that lines the cavities of the heart, blood vessels, and lymph vessels.

Diaphragm

A large, dome-shaped muscle located at the base of the lungs, playing a key role in respiration by contracting and expanding the chest cavity.