What does it mean when an accountant issues a ‘‘compilation’’ that claimed she was ‘‘not independent’’...
What does it mean when an accountant issues a ‘‘compilation’’ that claimed she was ‘‘not independent’’ and disclaimed the information provided for her report.?
Homework Answers
When the accountant is issuing a report with respect to a
compilation of financial statements for an entity, with respect to
which the accountant is not independent, the accountant's report
should be modified. In making a judgment about whether she is
independent, the accountant should be guided by the
AICPA's Code of Professional Conduct. The accountant should
indicate her lack of independence in a final paragraph of the
accountant's compilation report.
An accountant can still perform the compilation engagement but she has to give in report a note for lack of independence .
When an accountant issues this form of disclaimer of opinion,S he has no responsibility to apply any procedures beyond reading the financial statements for obvious material misstatements. Any procedures that may have been applied should not be described, except in the limited circumstances.Describing procedures that may have been applied might cause the reader to believe the finacial statements have been audited or reviewed.
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