(At) Other Reports
(At) Other Reports
(At) Other Reports
2. For the purpose of expressing negative assurance in the review report, the auditor
should obtain sufficient appropriate audit evidence primarily through inquiry and
analytical procedures to be able to draw conclusions.
4. In planning a review of financial statements, the auditor should obtain or update the
knowledge of the business including consideration of the entity's organization,
accounting systems, operating characteristics and the nature of its assets, liabilities,
revenues, and expenses.
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Obtaining written representations from management when considered
appropriate.
6. If the auditor has reason to believe that the information subject to review may be
materially misstated, the auditor should carry out additional or more extensive
procedures as are necessary to be able to express negative assurance or to confirm that
a modified report is required.
We conducted our review in accordance with the Philippine Standard on Review Engagements 2400. This
Standard requires that we plan and perform the review to obtain moderate assurance as to whether the
financial statements are free of material misstatement. A review is limited primarily to inquiries of company
personnel and analytical procedures applied to financial data and thus provides less assurance than an audit.
We have not performed an audit and, accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
financial statements are not presented fairly, in all material respects in accordance with Philippine Financial
Reporting Standards.
2. The objective of an agreed-upon procedures engagement is for the auditor to carry out
procedures of an audit nature to which the auditor and the entity and any appropriate
third parties have agreed and to report on factual findings.
4. The report is restricted to those parties that have agreed to the procedures to be
performed since others, unaware of the reasons for the procedures, may misinterpret
the results.
REPORTING
6. The report on an agreed-upon procedures engagement needs to describe the purpose
and the agreed-upon procedures of the engagement in sufficient detail to enable the
reader to understand the nature and the extent of the work performed.
7. The report of factual findings should contain:
title;
addressee (ordinarily the client who engaged the auditor to perform the agreed-
upon procedures);
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identification of specific financial or non-financial information to which the agreed-
upon procedures have been applied;
a statement that the procedures performed were those agreed upon with the
recipient;
a statement that the engagement was performed in accordance with the Philippine
Standard on Related Services applicable to agreed-upon procedures engagements;
a statement that the auditor is not independent of the entity if such is the case;
identification of the purpose for which the agreed-upon procedures were performed;
a listing of the specific procedures performed;
a description of the auditor's factual findings including sufficient details of errors and
exceptions found;
a statement that the procedures performed do not constitute either an audit or a
review and, as such, no assurance is expressed;
a statement that had the auditor performed additional procedures, an audit or a
review, other matters might have come to light that would have been reported;
a statement that the report is restricted to those parties that have agreed to the
procedures to be performed;
a statement (when applicable) that the report relates only to the elements, accounts,
items or financial and non-financial information specified and that it does not extend
to the entity's financial statements taken as a whole;
date of the report;
auditor's address; and
auditor's signature.
3. The procedures employed are not designed and do not enable the accountant to express
any assurance on the financial information.
5. The accountant should obtain a general knowledge of the business and operations of
the entity and should be familiar with the accounting principles and practices of the
industry in which the entity operates and with the form and content of the financial
information that is appropriate in the circumstances.
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If the accountant becomes aware that information supplied by management is
incorrect, incomplete, or otherwise unsatisfactory, the accountant should consider
performing the above procedures and request management to provide additional
information.
7. The accountant should read the compiled information and consider whether it appears
to be appropriate in form and free from obvious material misstatements.
9. The financial information compiled by the accountant should contain a reference such
as "Unaudited," "Compiled without Audit or Review," or "Refer to the Compilation
Report" on each page of the financial information or on the front of the complete set of
financial statements.
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6. In an engagement to examine prospective financial information, the auditor should
obtain sufficient appropriate evidence as to whether:
management's best-estimate assumptions on which the prospective financial
information is based are not unreasonable and, in the case of hypothetical
assumptions, such assumptions are consistent with the purpose of the information;
the prospective financial information is properly presented and all material
assumptions are adequately disclosed, including a clear indication as to whether they
are best-estimate assumptions or hypothetical assumptions; and
the prospective financial information is prepared on a consistent basis with historical
financial statements, using appropriate accounting principles.
7. The auditor should not express any opinion as to whether the results shown in the
prospective financial information will be achieved.
9. The auditor should not accept, or should withdraw from, an engagement when the
assumptions are clearly unrealistic or when the auditor believes that the prospective
financial information will be inappropriate for its intended use.
10. The auditor should obtain written representations from management regarding the
intended use of the prospective financial information, the completeness of significant
management assumptions and management's acceptance of its responsibility for the
prospective financial information.
Based on our examination of the evidence supporting the assumptions, nothing has come to our attention
which causes us to believe that these assumptions do not provide a reasonable basis for the forecast. Further,
in our opinion the forecast is properly prepared on the basis of the assumptions and is presented in
accordance with Philippine Financial Reporting Standards.
Actual results are likely to be different from the forecast since anticipated events frequently do not occur as
expected and the variation may be material.
This projection has been prepared for (describe purpose). As the entity is in a start-up phase the projection
has been prepared using a set of assumptions that include hypothetical assumptions about future events and
management's actions that are not necessarily expected to occur. Consequently, readers are cautioned that
this projection may not be appropriate for purposes other than that described above.
Based on our examination of the evidence supporting the assumptions, nothing has come to our attention
which causes us to believe that these assumptions do not provide a reasonable basis for the projection,
assuming that (state or refer to the hypothetical assumptions). Further, in our opinion the projection is
properly prepared on the basis of the assumptions and is presented in accordance with Philippine Financial
Reporting Standards.
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Even if the events anticipated under the hypothetical assumptions described above occur, actual results are
still likely to be different from the projection since other anticipated events frequently do not occur as
expected and the variation may be material.
When the auditor believes that the presentation and disclosure of the prospective
information is not adequate, the auditor should express a qualified or adverse
opinion or withdraw from the engagement as appropriate.
When the auditor believes that one or more significant assumptions do not provide a
reasonable basis for the prospective financial information, the auditor should either
express an adverse opinion or withdraw from the engagement as appropriate.
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4. An accountant who reviews the financial statements of an entity should issue a report
stating that a review
A. Provides less assurance than an audit.
B. Provides negative assurance that internal control is functioning as designed.
C. Provides only limited assurance that the financial statements are fairly presented.
D. Is substantially more in scope than a compilation.
7. Which of the following should NOT be included in an accountant's report based upon
the compilation of an entity's financial statements?
A. A statement that a compilation of the company's financial statements was made in
accordance with the Philippine Standard on Related Services applicable to
compilation engagements.
B. A statement that management is responsible for the financial statements.
C. A statement that the accountant has not audited or reviewed the statements.
D. A statement that the accountant does not express an opinion but provides only
negative assurance on the statements.
10. Given one or more hypothetical assumptions, a responsible party may prepare, to the
best of its knowledge and belief, an entity's expected financial position, results of
operations, and cash flows. Such prospective financial statements are known as
A. Pro forma financial statements C. Partial presentations
B. Financial projections D. Financial forecasts
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11. A financial forecast consists of prospective financial statements that present an entity's
expected financial position, results of operations, and cash flows. A forecast
A. Is based on the most conservative estimates.
B. Present estimates given one or more hypothetical assumptions.
C. Unlike a projection, may contain a range.
D. Is based on assumptions reflecting conditions expected to exist and courses of
action expected to be taken.
12. When an accountant examines prospective financial statements, the accountant's report
should include a separate paragraph that
A. Contains an opinion as to whether the prospective financial statements are properly
prepared on the basis of the assumptions and are presented in accordance with
generally accepted accounting principles in the Philippines.
B. Provides an explanation of the differences between an examination and an audit.
C. States that the accountant is responsible for events and circumstances up to 1 year
after the report's date.
D. Disclaims an opinion on whether the assumptions provide a reasonable basis for the
prospective financial statements.
14. The following statements relate to the examination of prospective financial information.
Which is false?
A. The auditor should express an opinion as to whether the results shown in the
prospective financial information will be achieved.
B. Before accepting an engagement to examine prospective financial information, the
auditor should consider the intended use of the information.
C. The auditor should not accept, or should withdraw from, an engagement to examine
prospective financial information when the assumptions-are clearly unrealistic.
D. When in the auditor's judgment an appropriate level of satisfaction has been
obtained, the auditor is not precluded from expressing positive assurance regarding
the assumptions.
15. Which of the following is prospective financial information for general use upon which
an accountant may appropriately report?
A. Financial projection C. Pro forma financial statement
B. Partial presentation D. Financial forecast
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