Choice "d" is correct. When a qualified opinion results from a limitation of scope, it should be

described in an explanatory paragraph preceding the opinion paragraph and referred to in both the

scope and opinion paragraphs of the auditor's report.

Choices "a", "b", and "c" are incorrect, as they do not comply with the rule above.

Choice "d" is correct. In a typical comfort letter, the accountants express an opinion (i.e., positive

assurance) concerning the financial statements' compliance (as to form) with the pertinent

accounting requirements of the SEC.

Choice "a" is incorrect. No assurance is generally provided in a comfort letter regarding the operation

of an entity's internal control.

Choice "b" is incorrect. A typical comfort letter is addressed to the underwriters of the securities.

Government Auditing Standards and the Single Audit Act are not applicable to a comfort letter

related to the issuance of securities.

Choice "c" is incorrect. Negative assurance (not positive) is typically provided regarding unaudited

condensed financial information.

Choice "d" is correct. The objective of a review of interim financial information of a public entity is to

provide the accountant with a basis for reporting whether material modifications should be made to

conform with GAAP.

Choice "a" is incorrect. Prospective financial information (concerning future events) is not part of the

interim financial information filed by a public company.

Choice "b" is incorrect. No form of opinion is expressed based on a review; however, limited

assurance is provided regarding the financial statements.

Choice "c" is incorrect. The objective of an interim review is not to provide guidance regarding the

timing of audit procedures.

Choice "b" is correct. A WebTrust engagement is an attestation engagement in which the CPA

determines whether the client's web site meets defined criteria relating to transaction integrity,

information protection, and disclosure of business practices. Attestation engagements should be

performed in accordance with Statements on Standards for Attestation Engagements (SSAEs).

Choice "a" is incorrect. Statements on Assurance Standards is a distracter.

Choice "c" is incorrect. Consulting services provided by CPAs range from advice on accounting-

related matters to a wide range of services involving diverse technical disciplines. Consulting services

performed by CPAs should be performed in accordance with Statements on Standards for Consulting

Services (SSCSs).

Choice "d" is incorrect. Audits (generally of financial statements) performed by CPAs should be

performed in accordance with Statements on Auditing Standards (SASs).

Choice "c" is correct. If an auditor chooses to report on information accompanying the basic financial

statements in a client-prepared document, the report should include a description of both the

character of the audit work performed and the degree of responsibility assumed.

Choice "a" is incorrect. There is no requirement that the auditor be specifically engaged to report on

such information. If auditing procedures have been applied to the information, the auditor is

permitted to report thereon.

Choice "b" is incorrect. The auditor is permitted but not required to report on such information.

Choice "d" is incorrect. If an auditor chooses to report on information accompanying the basic

financial statements in a client-prepared document, the report should include an opinion on the

information and a description of both the character of the audit work performed and the degree of

responsibility assumed.

Choice "c" is correct. Both the basis of accounting used by an entity to file its income tax return and the cash receipts and disbursements basis of accounting are comprehensive bases of accounting other than GAAP. OCBOAs also include: * A basis prescribed by a regulatory agency * A definite set of criteria having substantial support (e.g., price-level basis)

Choice "c" is correct. The auditor's standard audit report includes a statement that "An audit includes

assessing...significant estimates made by management..."

Choice "a" is incorrect. The standard audit report does not state that disclosures provide reasonable

assurance that the financial statements are free of material misstatement. The correct statement is:

"...standards require that we plan and perform the audit to obtain reasonable assurance that the

financial statements are free of material misstatement."

Choice "b" is incorrect. The standard audit report does not state that the auditor evaluated the

overall internal control. The correct statement is "An audit includes...evaluating the overall financial

statement presentation." Internal control is not mentioned in the standard audit report.

Choice "d" is incorrect. The standard audit report does not state "The financial statements are

consistent with those of the prior period." According to the second standard of reporting, consistency

is implicitly reported. Only if there is an inconsistency is an explicit statement included.

Choice "b" is correct. A "disclaimer of opinion" must be issued when a CPA is "associated" with FS of

a publicly held entity, but has not audited or (interim) reviewed such FS.

Choice "a" is incorrect. A "compilation report" refers to a report related to a non-public entity.

Choice "c" is incorrect. There is no such thing as an "unaudited association report."

Choice "d" is incorrect. The auditor did not audit the FS, so he/she cannot issue an opinion on them.

Choice "B" is the correct opinion. In a going concern situation that is properly disclosed, an unqualified opinion should be issued.

Choice "b" is correct. The objective of a review is to provide the accountant with a reasonable basis

for expressing limited assurance that there are no material modifications that should be made to the

accompanying financial statements for them to be in conformity with generally accepted accounting

principles.

Choice "a" is incorrect. When performing a review, the accountant does not gather enough evidence

to update an audit opinion.

Choice "c" is incorrect. There are no "standards of interim reporting."

Choice "d" is incorrect. Expressing an opinion as to whether the financial statements are presented

fairly in accordance with GAAP is the result of an audit, not a review.