Prior to commencing the compilation of financial statements of a nonpublic entity, the accountant should:
A)perform analytical procedures sufficient to determine whether fluctuations among account balances appear reasonable.
B)complete the preliminary phase of the study and evaluation of the entity's internal control.
C)verify that the financial information supplied by the entity agrees with the books of original entry and supporting documentation.
D)acquire a knowledge of any specialized accounting principles and practices used in the entity's industry.

Question

Quizplus · Accepted Answer

Before compiling financial statements for a nonpublic entity, it is essential to have a knowledge of any specialized accounting principles and practices used in the entity's industry. This will help the accountant to ensure that the financial statements are accurate and comply with the required standards. Options A, B, and C are also important steps in the accounting process, but acquiring knowledge of specialized accounting principles and practices is a more critical initial step.

Prior to Commencing the Compilation of Financial Statements of a Nonpublic