Smith, CPA, has been asked to issue a review report on the balance sheet of Cone Company, a nonissuer, and not on the other related financial statements. Smith may do so only if:

Question

Quizplus · Accepted Answer

Choice "C" is correct. An accountant may issue a review report on one financial statement, such as a balance sheet, as long as the scope of the inquiry and analytical procedures has not been restricted. Choice "A" is incorrect. There is no requirement that Smith compile the other financial statements. Choice "B" is incorrect. An accountant can still review only the balance sheet, even if the review discloses material departures from GAAP. These departures should be reflected in the accountant's report, however. Choice "D " is incorrect. Smith may audit only the balance sheet even if Cone is a continuing client.

Smith, CPA, Has Been Asked to Issue a Review Report