ExpertEasy1 markMultiple Choice
CPA · Question 75 · Area IV: Forming Conclusions and Reporting
An auditor is performing a 'preparation' engagement under SSARS. Which of the following is TRUE?
An auditor is performing a 'preparation' engagement under SSARS. Which of the following is TRUE?
Answer options:
A.
The auditor must be independent.
B.
The auditor does not issue a report.
C.
The auditor must verify the accuracy of the information.
D.
The financial statements cannot omit disclosures.
How to approach this question
Preparation = No Report. Compilation = Report. Review = Report. Audit = Report.
Full Answer
B.The auditor does not issue a report.✓ Correct
The auditor does not issue a report.
In a preparation engagement (AR-C 70), the accountant prepares financial statements pursuant to a specified financial reporting framework but does not issue a report or provide any assurance.
Common mistakes
Confusing Preparation with Compilation (which requires a report).
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