Jones Retailing, a Nonpublic Entity, Has Asked Winters, CPA, to Compile

question 42

Multiple Choice

Jones Retailing, a nonpublic entity, has asked Winters, CPA, to compile financial statements that omit substantially all disclosures required by generally accepted accounting principles. Winters may compile such financial statements, provided the:

• A)reason for omitting the disclosures is explained in the engagement letter and acknowledged in the management representation letter.
• B)financial statements are prepared on a comprehensive basis of accounting other than generally accepted accounting principles.
• C)distribution of the financial statements is restricted to internal use only.
• D)omission is not undertaken to mislead the users of the financial statements and is properly disclosed in the accountant's report.

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Definitions:

Territorial Space

Bands of concentric space radiating outward from the body.

Social Distance Zone

A concept in proxemics referring to the physical distance individuals prefer to maintain in social interactions to feel comfortable.

Personal Distance Zone

A spatial zone commonly reserved for interactions among good friends or family members, reflecting cultural or personal preferences for physical proximity.

Open Communication

A communication style that promotes transparency and free exchange of information and ideas in an organization or between individuals.