Question:
FYI Review Engagement - Review report when financial statements use a special-purpose framework. When using a special-purpose framework, the report should include an “emphasis-of-matter” paragraph stating that the financial statements are prepared in accordance with the special purpose framework and referencing the note to the financial statement describing the framework. Going Concern Section and Emphasis-of-Matter and Other-Matter Paragraphs 1. “Going Concern” section—When there is substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time (and disclosure of those uncertainties are adequate), add a “Going Concern” section to the review report labeled “Substantial Doubt About the Entity's Ability to Continue as a Going Concern”; if disclosure is not adequate, the matter would be addressed in the “Basis for Qualified (Adverse) Conclusion” section of the review report. 2. Emphasis-of-matter paragraphs—The accountant may add an emphasis-of-matter paragraph to the review report to draw readers' attention to a matter that is appropriately reported or disclosed in the financial statements; the accountant should add an emphasis-of-matter paragraph when the financial statements have been restated to correct a misstatement in previously issued financial statements. 3. Other-matter paragraphs—The accountant may add an other-matter paragraph to the review report to draw readers' attention to a matter that is relevant to their understanding of the review, the review report, or the accountant's responsibilities.
Author: Monique TylerAnswer:
Modified conclusion—When the accountant determines that the financial statements are materially misstated Qualified conclusion— 1. The accountant should express a qualified conclusion using the phrase “… except for the effect of the matter described in the Basis for Qualified Conclusion paragraph …” when the misstatement is material but not pervasive to the financial statements; see the sample review report with a qualified conclusion below. 2. Adverse conclusion—The accountant should express an adverse conclusion using the phrase “… due to the significance of the matter described in the Basis for Adverse Conclusion paragraph, the financial statements are not in accordance with …” when the misstatement is material and also pervasive to the financial statements; see the sample review report with an adverse conclusion below.
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