During an engagement to review the financial statements of a nonissuer an accountant becomes aware of a material departure from GAAP. If the accountant decides to modify the standard review report because management will not revise the financial statements, the accountant should:

Question

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Choice "B" is correct. If the accountant concludes that modification of the standard report is appropriate, the departure should be disclosed in a separate paragraph of the report. Choice "A" is incorrect. An accountant would not express negative assurance on the accounting principles that do not conform with GAAP in a review engagement. Choice "C" is incorrect. An accountant would not issue an opinion in a review engagement. Choice "D" is incorrect. An accountant would not express positive assurance (i.e., an opinion) on the accounting principles that conform with GAAP in a review engagement.

During an Engagement to Review the Financial Statements of a Nonissuer