You Have Been Hired to Perform a Compilation

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Examlex · Accepted Answer

The Answer is a. In a compilation, the public accountants are hired to draft financial statements based on information provided by the organization. A compilation involves collecting, classifying, and summarizing financial information, that is, basic bookkeeping and financial report preparation.
b. This type of engagement is technically not an assurance engagement because the public accountant does not provide an opinion on the quality of the information. No audit procedures are performed-the client is engaging the accountant's accounting expertise rather than his or her audit expertise. The public accountant is required to disclose errors or omissions that come to his or her attention but is not under any duty to search for such problems. The accountant always disclaims an opinion on compiled financial statements.
c. The standards applicable to compilation engagements are covered in the AICPA's Statements on Standards for Accounting and Review Services and international standards are covered in the IAASB's International Standard on Related Services Engagements to Compile Financial Statements.

You Have Been Hired to Perform a Compilation

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