An Accountant's Communication on the Financial Statements in a Compilation

question 42

Multiple Choice

An accountant's communication on the financial statements in a compilation engagement would NOT include a statement that ________.

• A) the statements may not be appropriate for the purposes of users
• B) the financial statement information has been compiled
• C) a compilation engagement consists primarily of inquiries of company personnel and analytical procedures applied to financial data
• D) financial statements have not been audited or reviewed and the accountant did not attempt to verify accuracy or completeness.

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Definitions:

Operating Expense

ongoing costs for running a product, business, or system.

Operating Profit

The earnings of a business from its core operations, excluding the effects of interest and taxes.

Mark-up

The surplus added onto the base cost of products intended to cover operational costs and generate profit.

Unit Cost

The financial outlay required for the production, storage, or acquisition of an individual product or service unit.