When an accountant is not independent of a client and is requested to perform a compilation of the client's financial statements,the accountant
A) Is precluded from accepting the engagement.
B) May accept the engagement and need not disclose the lack of independence.
C) May accept the engagement and should disclose the lack of independence, but need not indicate the reason for the lack of independence.
D) May accept the engagement and should disclose both the lack of independence and the reason for the lack of independence.

Question

Quizplus · Accepted Answer

The accountant may accept the engagement but should disclose the lack of independence to the client. The reason for the lack of independence need not be disclosed in this case. However, the accountant should be aware that a lack of independence may affect the reliability of the compiled financial statements.

When an Accountant Is Not Independent of a Client and Is