An auditor is performing a 'preparation' engagement under SSARS. Which of the following is true?

Answer options:

The auditor must issue a report.

The auditor is not required to be independent.

The auditor must verify the accuracy of the data.

The engagement provides limited assurance.

How to approach this question

Preparation (AR-C 70) = No Assurance, No Report, No Independence required. It's just bookkeeping.

Full Answer

B.The auditor is not required to be independent.✓ Correct

The auditor is not required to be independent.

A preparation engagement (AR-C 70) is a non-attest service where the accountant prepares financial statements. Independence is NOT required (unlike Review/Audit), and no report is issued.

Common mistakes

Thinking Preparation requires a report (Compilation does, Preparation does not).

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