ExpertMedium1 markMultiple Choice
CPA · Question 39 · Area IV: Forming Conclusions and Reporting
Which of the following is a required procedure in a review engagement of a nonissuer under SSARS?
Which of the following is a required procedure in a review engagement of a nonissuer under SSARS?
Answer options:
A.
Testing internal controls.
B.
Confirming accounts receivable.
C.
Obtaining a management representation letter.
D.
Observing inventory counts.
How to approach this question
Review = Inquiry + Analytics + Rep Letter. No testing of controls, no confirmations, no observation.
Full Answer
C.Obtaining a management representation letter.✓ Correct
AR-C 90 requires the accountant to perform analytical procedures and inquiries. Additionally, the accountant must obtain a written representation letter from management. Tests of details (confirmations, observation) and tests of controls are not performed.
Common mistakes
Confusing Review procedures with Audit procedures.
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