Before Performing a Review of a Nonpublic Entity's Financial Statements

question 3

Multiple Choice

Before performing a review of a nonpublic entity's financial statements, an accountant should:

• A) complete a series of inquiries concerning the entity's procedures for recording, classifying, and summarizing transactions.
• B) obtain a sufficient level of knowledge of the accounting principles and practices of the industry in which the entity operates.
• C) inquire whether management has omitted substantially all of the disclosures required by generally accepted accounting principles.
• D) apply analytical procedures to provide limited assurance that no material modifications should be made to the financial statements.

---

Definitions:

Ethnomethodologists

Ethnomethodologists are social scientists who study the ways in which people create and maintain a sense of social order in everyday life through their routines, practices, and interpersonal interactions.

Accounts

An explanation or report about events or actions, often used in accounting and finance to reflect financial transactions.

Sociologists

Scholars who study society and social behavior by examining the groups, institutions, and processes that people develop and participate in.

Ethnomethodologists

Researchers who study the ways in which people create, maintain, and understand their social realities through everyday practices.