An accounting service that involves performing inquiry and analytical procedures to provide a reasonable basis for expressing limited assurance that there are no material modifications that should be made to the financial statements for them to be in conformity with GAAP is best know as
A)a compilation.
B)an audit.
C)a review.
D)an agreed upon procedure.

Question

Quizplus · Accepted Answer

The accounting service described is a review, which involves performing inquiry and analytical procedures to provide limited assurance that the financial statements are in conformity with GAAP. A compilation (choice A) involves presenting financial information in the form of financial statements without providing any assurance on the accuracy or completeness of the information. An audit (choice B) involves providing reasonable assurance that the financial statements are free from material misstatements. An agreed upon procedure (choice D) is a service in which specified procedures are performed and a report is issued based on findings, but no assurance is provided on the financial statements as a whole.

An Accounting Service That Involves Performing Inquiry and Analytical Procedures