What does retrospective review mean on the CPA exam?
Retrospective review. Comparing last period's accounting estimates against what actually happened, to see whether management's judgments lean consistently in one direction.
Defined against AU-C 540.13.
Which CPA exam sections use retrospective review?
Retrospective review appears in the AUD section of the CPA exam.
Related terms
- engagement quality review: An objective evaluation of the significant judgments and the conclusions reached, performed by someone not on the engagement team before the report is released.
- tentative minimum tax: The alternative minimum tax computed on its own, before comparing it to the regular tax.
- balance sheet date: The last day of the reporting period.
- recognized gain: The part of realized gain that actually goes on the return this year.
- suitably designed: The controls, if they operated as described, would achieve the stated objective.
- applicable financial reporting framework: The framework management adopts for the statements, such as GAAP or a special purpose framework.