When an Accountant Compiles a Prescribed Form and the Financial

question 35

Multiple Choice

When an accountant compiles a prescribed form and the financial statements contain a departure from the information specified by the prescribed form,the accountant should

• A) Withdraw from the engagement.
• B) Issue an adverse opinion.
• C) Ignore the departure because the financial statements do not purport to be in accordance with GAAP.
• D) Disclose the departure in the body of the accountant's report.

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Definitions:

Net Operating Income

The net income of a company before taxes and interest are taken out, but after operational costs have been deducted.

Average Operating Assets

Average operating assets are calculated as the average total assets used in day-to-day operations over a specified period, typically used in performance measurement.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Units per Year

A measure of production output or activity volume, indicating the number of units produced or sold within a year.