When providing limited assurance that the financial statements of a nonissuer require no material modifications to be in accordance with generally accepted accounting principles, the accountant should:

Question

Quizplus · Accepted Answer

Choice "C" is correct. In a review engagement, the auditor should possess a level of knowledge of the accounting principles and practices of the industry in which the entity operates. This will provide, through the performance of inquiry and analytical procedures, a reasonable basis for expressing limited assurance that there are no material modifications that should be made to the financial statements to be in conformity with generally accepted accounting principles. Choice "A" is incorrect. Assessing the risk that a material misstatement could occur in a financial statement assertion is an audit procedure, not a review procedure. Choice "B" is incorrect. Confirmation with the entity's attorney is an audit procedure, not a review procedure. Choice "D" is incorrect. Development of audit programs are part of an audit engagement, not a review procedure.

When Providing Limited Assurance That the Financial Statements of a Nonissuer