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NEW QUESTION: 1
An accountant has compiled the financial statements of a nonissuer but declines to issue a compilation
report. This is an example of:
A. An appropriate reporting decision, if the compiled financial statements are not expected to be used by
a third party.
B. An inappropriate reporting decision, because SSARS require that a report be issued whenever an
accountant is associated with financial statements.
C. An inappropriate reporting decision, if the accountant is not independent with respect to the nonpublic
entity.
D. An appropriate reporting decision, as long as the financial statements are prepared in conformity with
GAAP.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Choice "C" is correct. If the accountant has compiled the financial statements of a nonissuer, and the
compiled financial statements are not expected to be used by a third party, the accountant may decline to
issue a compilation report.
Choice "A" is incorrect, since SSARS allow the accountant to decline to issue a compilation report when
the compiled financial statements are not expected to be used by a third party.
Choice "B" is incorrect, since there is no requirement that the accountant be independent when the
accountant declines to issue a compilation report. Note that an accountant who lacks independence is still
permitted to compile the financial statements of a nonissuer entity.
Choice "D" is incorrect, since there is no requirement that the financial statements be prepared in
conformity with GAAP when the accountant declines to issue a compilation report.

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