If an Accountant Is Engaged to Compile the Financial Statements

question 38

Multiple Choice

If an accountant is engaged to compile the financial statements of a private entity and the statements omit substantially all disclosures required by GAAP, which of the following alternatives is correct?

• A) If the accountant concludes that the omissions result in misleading financial statements and the matter cannot be resolved, the accountant should withdraw from the engagement.
• B) The report should be amended to state that the financial statements have been prepared in accordance with a comprehensive basis of accounting other than GAAP.
• C) The report should be amended to state that the financial statements have not been compiled in accordance with standards for compilation and review engagements.
• D) The report should indicate that the statements are special-purpose financial statements that are not comparable to those of prior periods.

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Definitions:

Complex Process

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Path-Goal Theory

A leadership theory that focuses on how leaders motivate followers to accomplish designated goals by clarifying the path to these goals.

Trait Approach

A perspective in leadership studies focusing on identifying specific qualities that differentiate leaders from non-leaders.

Authentic Leadership

A leadership style characterized by the leader’s genuine, transparent, and ethical behavior towards followers.