Before Performing a Compilation of the Financial Statements of a Nonpublic

question 64

Multiple Choice

Before performing a compilation of the financial statements of a nonpublic entity, an accountant should

• A) Perform a thorough study and evaluation of the internal control system.
• B) Complete a series of inquiries concerning the entity's procedures for recording, classifying, and summarizing transactions.
• C) Design working papers intended to provide sufficient competent evidential matter to afford a reasonable basis for a compilation opinion.
• D) Obtain an understanding of the accounting principles and practices of the industry in which the entity operates.

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Definitions:

Comptroller

An officer or official in an organization who oversees financial and accounting matters, including audits, budgeting, and financial planning.

Sampling Distribution

The distribution of a statistic over many repeated samples drawn from the same population.

Standard Deviation

A tool for measuring the degree to which data points are scattered or spread apart.

Population Mean

The sum of all values in a population divided by the total number of values.