When performing a review of interim financial information of a publicly traded c
ID: 2339434 • Letter: W
Question
When performing a review of interim financial information of a publicly traded company, the independent accountant is trying to determine if: (a) The financial statements are prepared in accordance with GAAP and 4. (b) Material modifications need to be made to the financial statements irn (c) Condensed financial statements should be included in a client (d) There is a reasonable basis for expressing an opinion on the financial are fairly stated. order to bring them in conformity with GAAP. registration statement. statements taken as a whole. 5. Ifan auditor prepared a report on financial statements prepared using the cash receipts and disbursements basis of accounting, the report issued would include all of the following except: (a) A statement that the audit was performed in accordance with GAAS. (b) An opinion as to whether the financial statements are fairly stated in accordance with the cash receipts and disbursements basis of accounting. (c) A reference to the note in the financial statements that describes the cash receipts and disbursements basis of accounting. A statement to the effect that the cash receipts and disbursements basis of accounting is not a comprehensive basis of accounting. (d) 6. When an independent CPA is engaged to assist in preparing the financial statements of a publicly held company, but has not audited or reviewed these statements, the CPA should issue a disclaimer of opinion. In these situations, the CPA has no responsibility other than: (a) Reading the financial statements for obvious material misstatements (b) Determining whether the financial statements are prepared in conformity with GAAP Determining whether management has elected to substantially omit all required disclosures. Documenting that internal control is not being relied upon. (c) (d)Explanation / Answer
4 (b) Objective of review by an independent accountant in case of interim financial in Is to ascertain that if any material modification needs to be made to the financial statements in order to bring them in conformity with GAAP
5 (d) - Auditor need not to include that cash receipt and disbursements basis of accounting is not a comprehensive basis of accounting when he is preparing a report on financial statements prepared on the basis of cash receipts and disbursement basis of accounting.
6 (a) - If CPA has not audited and reviewed but assisted in the preparation of the financial statements then CPA is responsible for making the financial statements free from errors.
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