If a Nonpublic Company Asks an Accountant to Perform a Review

question 90

Multiple Choice

If a nonpublic company asks an accountant to perform a review engagement, and the accountant has an immaterial direct financial interest in the company, the accountant is:

• A) independent because the financial interest is immaterial and, therefore, may issue a review report.
• B) not independent and, therefore, may not issue a review report.
• C) not independent and, therefore, may not be associated with the financial statements.
• D) not independent and, therefore, may issue a review report, but may not issue an auditor's opinion.

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Definitions:

Associative Variables

Factors in statistical analysis that are linked or related in such a way that their values change together in a predictable pattern.

Mathematical Models

Abstractions and representations of real-world systems through mathematical expressions to predict and analyze their behavior.

Historical Data

Collected data from past events and trends used to analyze and predict future outcomes or behaviors.

Business Cycle

The fluctuations in economic activity that an economy experiences over a period of time, characterized by periods of expansion and recession.