The following questions concern engagements other than the audit of financial statements performed by accountants. Choose the best response.
a. Which of the following is a prospective financial statement for general use upon
which an accountant may appropriately report?
(1) Financial projection
(2) Partial presentation
(3) Pro forma financial statement
(4) Financial forecast
838Part 6 / OTHER ASSURANCE AND NONASSURANCE SERVICES
b. Which of the following procedures would most likely be performed during an en-
gagement to compile the financial statements of a nonissuer?
(1) Read the financial statements and consider whether they are appropriate in form
and free from obvious material errors
(2) Perform inquiry and analytical procedures
(3) Obtain a representation letter from management
(4) Send accounts receivable confirmations
c. Which of the following procedures would most likely be performed during the en-
gagement to review the annual financial statements of a nonissuer?
(1) Observation of inventory
(2) Confirmation of notes receivable
(3) Communication with the predecessor accountant
(4) Comparison of the current financial statements with prior period financial
statements.
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