Practice Test 8

A publicly traded company (an issuer) is required to have its financial statements audited and also needs the auditor to report on the effectiveness of internal control over financial reporting as of year-end. The auditor will plan and perform an integrated approach and issue two opinions. Which engagement is required in this situation?

A community bank asks a CPA to perform procedures on a borrower’s schedule of accounts receivable and report only the procedures performed and findings, without providing an opinion or conclusion. The borrower is a privately held company (a nonissuer), and the bank will specify the procedures to be performed. What is the correct engagement type given the client’s needs?