In a Compilation Engagement, an Accountant Drafts Financial Statements of an Entity

question 76

Multiple Choice

In a compilation engagement, an accountant drafts financial statements of an entity based on information provided by the:

• A) shareholders.
• B) audit committee.
• C) management or owners.
• D) board of directors.
• E) company.

---

Definitions:

Footnote Disclosure

Additional information provided at the bottom of financial statements, explaining the numbers or policies above.

Cumulative Effect Change

The aggregate change in a company's earnings resulting from a change in accounting principle, reported in the period in which the change is made.

Opening Retained Earnings

The balance of retained earnings at the beginning of the accounting period.

Comparative Financial Statements

Financial statements that present financial information for multiple periods side-by-side, allowing for analysis and comparison across different time frames.