You are preparing to issue a report on the compilation of financial statements for a nonpublic company. Prior to issuing the report you should
A) read the financial statements to determine if they are free from obvious material errors.
B) perform analytical procedures to determine if they are free from material misstatements.
C) perform tests of balances on selected accounts to determine if they are free from material misstatements.
D) perform limited control tests to determine if there are any material misstatements.

Question

Quizplus · Accepted Answer

Reading the financial statements to determine if they are free from obvious material errors is a necessary step before issuing a report on the compilation of financial statements for a nonpublic company. This process involves a general review to identify any glaring mistakes but does not extend to the depth of analytical procedures, tests of balances, or control tests, which are more characteristic of reviews or audits.

You Are Preparing to Issue a Report on the Compilation