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NEW QUESTION: 1
This question consists of an item pertaining to possible deficiencies in an accountant's review report.
Jordan & Stone, CPAs, audited the financial statements of Tech Co., a nonissuer, for the year ended
December 31, 20X1, and expressed an unqualified opinion. For the year ended December 31, 20X2, Tech
issued comparative financial statements. Jordan & Stone reviewed Tech's 20X2 financial statements and
Kent, an assistant on the engagement, drafted the accountants' review report below. Land, the
engagement supervisor, decided not to reissue the prior year's auditors' report, but instructed Kent to
include a separate paragraph in the current year's review report describing the responsibility assumed for
the prior year's audited financial statements. This is an appropriate reporting procedure. Land reviewed
Kent's draft and indicated in the Supervisor's Review Notes below that there were several deficiencies in
Kent's draft.
Accountant's Review Report
We have reviewed and audited the accompanying balance sheets of Tech Co. as of December 31, 20X2
and 20X1, and the related statements of income, retained earnings, and cash flows for the years then
ended, in accordance with Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants and generally accepted auditing standards. All
information included in these financial statements is the representation of the management of Tech Co. A
review consists principally of inquiries of company personnel and analytical procedures applied to financial
data. It is substantially less in scope than an audit in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding the financial statements taken
as a whole. Based on our review, we are not aware of any material modifications that should be made to
the accompanying financial statements. Because of the inherent limitations of a review engagement, this
report is intended for the information of management and should not be used for any other purpose. The
financial statements for the year ended December 31, 20X1, were audited by us and our report was dated
March 2, 20X2. We have no responsibility for updating that report for events and circumstances occurring
after that date.
Jordan and Stone, CPAs
March 1, 20X3
Supervisor's Review Notes
There should be an indication of the type of opinion expressed on the prior year's audited financial
statements in the fourth (separate) paragraph.
A. Incorrect
B. Correct
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Correct. An example of such a separate paragraph is the following: "The financial statements for the year
ended December 31, 20X1 were audited by us and we expressed an unqualified opinion on them in our
report dated March 1, 20X2 but we have not performed any auditing procedures since that date."
NEW QUESTION: 2
Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called
A. derivative exchange markets.
B. financial markets.
C. fund-available markets.
D. commodity markets.
Answer: B
NEW QUESTION: 3
Which is the BEST example of stimulus generalization?
A. Ricky became more productive in math and simultaneously his reading improved.
B. Tim learned to ask for help from his teacher and now can ask a fellow student for help.
C. Bonnie learned to choose and wear coordinated outfits but after one month she would only select red outfits.
D. Jim was taught to say "hello" and continues to say "hello" to his trainer.
Answer: B
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