The Report of a CPA on a Review of the Financial

question 93

Multiple Choice

The report of a CPA on a review of the financial statements of a nonpublic entity should not include a statement that

• A) all information included in the financial statements is the representation of the entity's management.
• B) the review was performed in accordance with generally accepted auditing standards.
• C) the CPA is not aware of any material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles.
• D) a review consists principally of inquiries of company personnel and analytical procedures applied to financial data.

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Definitions:

Liability Account

An accounting record that captures the amount a company owes to others, such as loans, accounts payable, or mortgages.

Owner's Drawings Account

An equity account that tracks the amounts withdrawn by the owner(s) of a business from the company for personal use.

Right Side

In accounting, this refers to the credit side of a ledger account, opposite of the left side (debit side), reflecting increases in liabilities, equity, and revenue accounts.

Account

A record used to keep track of financial transactions within a specific category in accounting.