When an Accountant Is Not Independent of an Entity and Is

question 35

Multiple Choice

When an accountant is not independent of an entity and is requested to perform a compilation of the entity's financial statements,the accountant

• A) is precluded from accepting the engagement.
• B) may accept the engagement and need not disclose the lack of independence.
• C) may accept the engagement and should disclose the lack of independence, but need not indicate the reason for the lack of independence.
• D) may accept the engagement and should disclose both the lack of independence and the reason for the lack of independence.

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Definitions:

Z-test

A statistical test used to determine whether two population means are different when the variances are known and the sample size is large.

µ = 15

Represents the mean of a population is equal to 15.

Z-statistic

A measure used in statistics to quantify the deviation of a data point or a group of data points from the mean, expressed in terms of standard deviations.

Two-tailed Test

A statistical test that allows for the exploration of relationships in both directions, enabling the detection of significant differences regardless of the direction.