ExpertEasy1 markMultiple Choice
CPA · Question 49 · Area IV: Reporting
An auditor is performing a 'preparation' engagement under SSARS (AR-C 70). Which of the following statements is correct?
An auditor is performing a 'preparation' engagement under SSARS (AR-C 70). Which of the following statements is correct?
Answer options:
A.
The accountant must be independent.
B.
The accountant must issue a disclaimer report.
C.
The accountant does not issue a report.
D.
The accountant must verify the accuracy of the information provided by management.
How to approach this question
Preparation = No Report. Compilation = Report. Review = Report. Audit = Report.
Full Answer
C.The accountant does not issue a report.✓ Correct
The accountant does not issue a report.
AR-C 70 (Preparation) is a non-attest service where the accountant prepares financial statements but does not issue a report. This distinguishes it from a Compilation (AR-C 80).
Common mistakes
Confusing Preparation and Compilation.
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