An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that:

Question

Quizplus · Accepted Answer

Accepting an engagement to apply agreed-upon procedures to prospective financial statements involves performing only those procedures that the users of the report agree to have performed. The accountant is not providing an opinion or an assurance on the prospective financial statements as a whole. Therefore, the distribution of the report is limited to the specified users involved, as stated in option A. Option B is incorrect because the engagement only involves applying agreed-upon procedures, not examining the financial statements. Option C is also incorrect as the responsibility for the adequacy of the procedures performed rests with the specified users or responsible party, not the accountant. Option D is incorrect because negative assurance is not provided in an engagement to apply agreed-upon procedures.

An Accountant May Accept an Engagement to Apply Agreed-Upon Procedures