Case Study - ZZZ Best Inc. - Case Study ZZZ Best Inc 1 Ernst Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a

Case Study - ZZZ Best Inc. - Case Study ZZZ Best Inc 1...

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Case Study ZZZ Best, Inc. 1. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company's quarterly statements for three months ended July 31, 1986. How does a review differ from an audit particularly in terms of the level of assurance implied by auditor's report? A quarterly review report is issued by a CPA and reviewed by an auditor to provide assurance that the financial statements are fair and follow the GAAP standards. Quarterly reports only provide limited assurance because an external auditor does not perform auditing tests to detect control weaknesses, misstatements or fraud. Quarterly reviews are less detailed and less rigorous than annual audits due to the absence of the external auditor. 2. SAS No. 106 "Audit Evidence," identifies the principal "management assertions" that underlie a set of financial statements. The occurrence assertion was particularly critical for ZZZZ Best's insurance restoration contracts. ZZZZ Best's auditors obtained third-party confirmations to support the contracts, reviewed
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