[kukuna2008]

working on Ninja’s MCQs, however, i am questioning the answer of this.

Which of the following statements is correct regarding a review engagement of a nonpublic company’s financial statements performed in accordance with the Statements on Standards for Accounting and Review Services (SSARS)?

A.An accountant must establish an understanding with the client in an engagement letter.

B.An accountant must obtain an understanding of the client’s internal control when performing a review.

C.A review provides an accountant with a basis for expressing limited assurance on the financial statements.

D.A review report contains an accountant’s opinion of the financial statements taken as a whole.

the correct answer is C. I personally thought A and C both correct, but the explanation said “The accountant should establish an understanding with the client, preferably in writing, prior to a review. However, the standards do not mandate that an engagement letter be used for this purpose.” in according to SSARS 21, “Engagement letter is required.”.

Can anyone tell me is my understanding correct?

FAR - 83, 04/2015
AUD - 73, 86, 08/2015
REG - 75
BEC - 71, rematch in 04/2016