Which of the following procedures should an accountant perform during an engagement to review the financial statements of a nonpublic entity?
A)Communicate reportable conditions discovered during the assessment of control risk.
B)Obtain a client representation letter from members of management.
C)Send bank confirmation letters to the entity's financial institutions.
D)Examine cash disbursements in the subsequent period for unrecorded liabilities.

Question

Quizplus · Accepted Answer

In an engagement to review financial statements, obtaining a client representation letter from members of management is a standard procedure. This letter confirms management's responsibility for the financial statements and provides evidence for the accountant's understanding of the entity and its operations. The other choices, such as communicating reportable conditions, sending bank confirmation letters, and examining cash disbursements, are more relevant in an audit engagement rather than a review engagement.

Which of the Following Procedures Should an Accountant Perform During