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NEW QUESTION: 1
During an engagement to review the financial statements of a nonissuer an accountant becomes aware of
a material departure from GAAP. If the accountant decides to modify the standard review report because
management will not revise the financial statements, the accountant should:
A. Express negative assurance on the accounting principles that do not conform with GAAP.
B. Express positive assurance on the accounting principles that conform with GAAP.
C. Issue an adverse or an "except for" qualified opinion, depending on materiality.
D. Disclose the departure from GAAP in a separate paragraph of the report.
Choice "B" is correct. If the accountant concludes that modification of the standard report is appropriate,
the departure should be disclosed in a separate paragraph of the report.
Choice "A" is incorrect. An accountant would not express negative assurance on the accounting principles
that do not conform with GAAP in a review engagement.
Choice "C" is incorrect. An accountant would not issue an opinion in a review engagement.
Choice "D" is incorrect. An accountant would not express positive assurance (i.e., an opinion) on the
accounting principles that conform with GAAP in a review engagement.