Other Reporting Considerations Practice Test

A nonissuer retailer is undergoing a review engagement under AICPA standards for interim financial statements for the quarter ended March 31, 20X6. In the accompanying quarterly press release, management states “operating cash flows were positive,” but the interim statement of cash flows included with the reviewed financial statements shows negative operating cash flows. Management refuses to revise the press release. What action should the accountant take regarding the inconsistency?

A nonissuer health services entity is audited under AICPA standards and presents audited financial statements accompanied by required supplementary information (RSI) related to pension funding. The auditor identifies that the RSI uses a discount rate inconsistent with the one used in the audited pension note, and management refuses to correct the RSI. The RSI is clearly labeled as “required supplementary information,” and the auditor has performed the applicable limited procedures. How should the auditor report discrepancies between the financial statements and other information?