An accountant compiles unaudited financial statements that are not expected to be used by a third party. The accountant may decline to issue a compilation report provided:

Question

Quizplus · Accepted Answer

Choice "B" is correct. The accountant may decline to issue a compilation report provided that each page of the financial statements is clearly marked to restrict its use and a written engagement letter is used to document the understanding with the client. Choice "A" is incorrect, since a written engagement letter is required to document the understanding with the client, and since representation letters are not required in compilation engagements. Choice "C" is incorrect, since the accountant may decline to issue a compilation report provided that each page of the financial statements is clearly marked to restrict its use and a written engagement letter is used to document the understanding with the client. Representation letters are not required in compilation engagements. Choice "D" is incorrect, since the accountant may decline to issue a compilation report provided that each page of the financial statements is clearly marked to restrict its use (and a written engagement letter is used to document the understanding with the client)

An Accountant Compiles Unaudited Financial Statements That Are Not Expected