When compiling the financial statements of a nonissuer, an accountant should:

Question

Quizplus · Accepted Answer

Choice "B" is correct. When compiling the financial statements of a nonissuer, an accountant should understand the accounting principles and practices of the entity's industry. Choice "A" is incorrect. Reviewing agreements with financial institutions for restrictions is generally performed during an audit. Choice "C" is incorrect. Inquiring of key personnel concerning related parties and subsequent events is not required in a compilation. Choice "D" is incorrect. Performing ratio analyses of the financial data of comparable prior periods is generally performed for review engagements and audits, not compilations.

When Compiling the Financial Statements of a Nonissuer, an Accountant