Reference no: EM132971208

Problem 1: an emphasis of matter paragraph would be used:

a. when the company has disclosed a material uncertainty about its ability to continue as a going concern

b. to provide additional information that is not presented or discosed in managemen's financial statements

c. so that public companies can always receive unmodified audit opinions

d. to describe the auditors exercise of judgement during the performance of the audit

Problem 2: when a company's financial statements in a review for compilation engagement contain a known material-departure from GAAP, what should the accountant's report do?

a. Make no mention of the departure in a compilation report because it contains an explicit disclaimer of opinion

b. express the adverse coclusion. "the accompanying financial statements are not presented in conformity with generally accepted accounting principles"

c. explain the departure as necessary to make the statements not misleading, and then given the standard compilation report disclaimer.

d. give the standard review report because it provided only negative assurance