An Accountant Has Compiled the Financial Statements of a Nonissuer

question 39

Multiple Choice

An accountant has compiled the financial statements of a nonissuer but declines to issue a compilation report. This is an example of:

• A) An inappropriate reporting decision, because SSARS require that a report be issued whenever an accountant is associated with financial statements.
• B) An inappropriate reporting decision, if the accountant is not independent with respect to the nonpublic entity.
• C) An appropriate reporting decision, if the compiled financial statements are not expected to be used by a third party.
• D) An appropriate reporting decision, as long as the financial statements are prepared in conformity with GAAP.

---

Definitions:

Herbert Spencer

A 19th-century English philosopher, biologist, and sociologist who contributed to the development of social Darwinism, emphasizing survival of the fittest in human society.

Darwin's Ideas

Refers to Charles Darwin's theories, particularly on natural selection and evolution, explaining the diversity of life on Earth.

World War II

A global conflict that took place from 1939 to 1945, involving most of the world's nations and resulting in significant military and civilian casualties.

Dispositions

Consistent preferences, ways of thinking, and behavioral tendencies that manifest across varying situations and over time.