to the continuing CPA. Generally, the report would be addressed to the requesting party (e.g.,
management, the board of directors, etc.).
Choice "c" is incorrect. There is no disclaimer in the report; however, the CPA does state that
the preparers of the financial statements are responsible for proper accounting treatment.
Choice "d" is incorrect. Use of the report is restricted to specified parties.
QUESTION: 104
The financial statements of KCP America, a U.S. entity, are prepared for inclusion in the
consolidated financial statements of its non-U.S. parent. These financial statements are
prepared in conformity with the accounting principles generally accepted in the parent's country
and are for use only in that country. How may KCP America's auditor report on these financial
statements?

I). A U.S.-style report (unmodified).
II). A U.S.-style report modified to report on the accounting principles of the parent's country.
III). The report form of the parent's country.
A. Option A
B. Option B
C. Option C
D. Option D

Answer(s): D
Explanation:
Choice "d" is correct. No - Yes - Yes. When financial statements are prepared in conformity with
the accounting principles generally accepted in the parent's country and are for use only in that
country, the auditor may report using either a U.S.-style report modified to report on the
accounting principles of the parent's country or the report form of the parent's country. Choices
"a", "b", and "c" are incorrect, per the above Explanation.
QUESTION: 105
Which of the following is true regarding the auditor's responsibility to report on information
accompanying the basic financial statements in a client-prepared document?

A. The auditor may report on information accompanying the basic financial statements in a
client prepared document only if he or she has been specifically engaged to do so.
B. The auditor is required to express an opinion on whether information accompanying the basic
financial statements in a client-prepared document is fairly stated in all material respects in
relation to the financial statements taken as a whole.
C. If an auditor chooses to report on information accompanying the basic financial statements in
a client prepared document, the report should include a description of the character of the audit
work performed.
D. If an auditor chooses to report on information accompanying the basic financial statements in

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