Which of the following procedures is ordinarily performed by an accountant in a compilation engagement of a nonpublic entity?
A) Reading the financial statements to consider whether they are free of obvious mistakes in the application of accounting principles
B) Obtaining written representations from management indicating that the compiled financial statements will not be used to obtain credit
C) Making inquiries of management concerning actions taken at meetings of the stockholders and the board of directors
D) Applying analytical procedures designed to corroborate management's assertions that are embodied in the financial statement components
E) The preparation of a cutoff bank reconciliation

Question

Quizplus · Accepted Answer

In a compilation engagement, the accountant is responsible for reading the financial statements to determine whether they appear to be free of obvious misstatements, errors, or inconsistencies. However, the accountant is not required to perform analytical procedures, obtain written representations from management, make inquiries of management concerning actions taken at meetings of the stockholders and the board of directors, or prepare a cutoff bank reconciliation.

Which of the Following Procedures Is Ordinarily Performed by an Accountant