A CPA Should Not Normally Refer to Which One of the Following

question 1

Multiple Choice

A CPA should not normally refer to which one of the following subjects in a "comfort letter" to underwriters?

• A) The independence of the CPA.
• B) Changes in financial-statement items during a period subsequent to the date and period of the latest financial statements in the registration statement.
• C) Unaudited financial statements and schedules in the registration statement.
• D) Management's determination of line of business classifications.

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Definitions:

Comparative Balance Sheet

A financial statement that presents a company's financial position at different points in time side-by-side to assess changes in assets, liabilities, and equity.

Cash Dividend

A cash dividend is a payment made by a company to its shareholders, typically from its profits, in the form of cash or electronic funds transfer.

Financing Activities

Transactions and events involving changes in equity and debt in the financial structure of a company, such as issuing shares or taking loans.

Comparative Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders’ equity of a company at two or more different points in time, used to analyze trends in financial position.