Which of the following inquiry or analytical procedures ordinarily is performed in an engagement to review financial statements?

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Home » Test Prep » CPA Auditing and Attestation » Which of the following inquiry or analytical procedures ordinarily is performed in an engagement to review a nonissuer’s financial statements?

Which of the following inquiry or analytical procedures ordinarily is performed in an engagement to review a nonissuer’s financial statements?
A. Analytical procedures designed to test the accounting records by obtaining corroborating evidential matter.
B. Inquiries concerning the entity’s procedures for recording and summarizing transactions.
C. Analytical procedures designed to test management’s assertions regarding continued existence.
D. Inquiries of the entity’s attorney concerning contingent liabilities.

Correct Answer: B Explanation/Reference:

Choice "b" is correct. When reviewing a nonissuer’s financial statements, an accountant ordinarily makes inquiries concerning the entity’s procedures for recording and summarizing transactions.

Choices "a", "c", and "d" are incorrect. The following audit procedures generally are not performed in a review engagement:
A. Tests of the accounting records.
C. Tests of management’s assertions regarding continued existence.
D. Inquiries of the entity’s attorney concerning contingent liabilities.

114. Which of the following inquiry or analytical procedures ordinarily is performed inan engagement to review a nonpublic entity’s financial statements?a. analytical procedures designed to test the accounting records by obtainingcorroborating evidential matter.b. inquiries concerning the entity’s procedures for recording and summarizingtransactions.c. analytical procedures designed to test management’s assertion regardingcontinued existence.d. inquiries of the entity’s attorney concerning contingent liabilities.