If an Accountant Is Engaged to Compile the Financial Statements

question 38

Multiple Choice

If an accountant is engaged to compile the financial statements of a private entity and the statements omit substantially all disclosures required by GAAP, which of the following alternatives is correct?

• A) If the accountant concludes that the omissions result in misleading financial statements and the matter cannot be resolved, the accountant should withdraw from the engagement.
• B) The report should be amended to state that the financial statements have been prepared in accordance with a comprehensive basis of accounting other than GAAP.
• C) The report should be amended to state that the financial statements have not been compiled in accordance with standards for compilation and review engagements.
• D) The report should indicate that the statements are special-purpose financial statements that are not comparable to those of prior periods.

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Definitions:

Serotonin

A neurotransmitter important for mood regulation, digestion, sleep, and other bodily functions.

Dopamine Antagonists

Substances that block dopamine receptors, often used in the treatment of psychiatric disorders such as schizophrenia.

Phenothiazines

A class of antipsychotic drugs used to treat mental disorders such as schizophrenia by blocking dopamine receptors in the brain.

Schizophrenia

A mental disorder characterized by distortions in thinking, perception, emotions, language, sense of self, and behavior.