Inquiry of the entity's personnel and analytical procedures are the primary bases for the issuance of a(n)
A) Compilation report on financial statements for a nonpublic company in its first year of operations.
B) Auditor's report on financial statements supplemented with price-level information.
C) Review report on comparative financial statements for a nonpublic company in its second year of operations.
D) Management advisory report prepared at the request of the entity's audit committee.

Question

Quizplus · Accepted Answer

A review report on comparative financial statements for a nonpublic company in its second year of operations primarily relies on inquiry of the entity's personnel and analytical procedures to provide limited assurance that the financial statements are free from material misstatement. A compilation report for a nonpublic company in its first year of operations does not provide any assurance on the financial statements, and an auditor's report supplemented with price-level information is not a common engagement. A management advisory report is not based on the entity's financial statements or procedures.

Inquiry of the Entity's Personnel and Analytical Procedures Are the Primary