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:

APR

Annual Percentage Rate, which measures the cost of credit, including interest and any other charges, expressed as a yearly interest rate.

Interest

The cost of borrowing money, typically expressed as a percentage, charged by lenders to borrowers.

Credit Cards

Financial tools issued by banks that allow users to borrow funds within an agreed limit for purchases or cash advances.

APR

Annual Percentage Rate, a measure used to calculate the cost of borrowing, including interest and other charges, expressed as a yearly rate.