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CA Final · Advanced Auditing, Assurance and Professional Ethics · Related Services

A regulator requires Sagar Foods Ltd. to file a schedule of a particular financial item in a prescribed format. CA Rao is engaged to compile this schedule from information supplied by management. In the compilation report, what should CA Rao state about the accuracy and completeness of the information used?

CA Rao should state that the schedule and the accuracy and completeness of the information used to compile it are management's responsibility. Because a compilation engagement is not an assurance engagement, the practitioner is not required to verify the information supplied and gives no opinion on it.

  1. AThat CA Rao has verified the accuracy and completeness of the information through test checks
  2. BThat the schedule and the accuracy and completeness of the information used to compile it are management's responsibility, and CA Rao is not required to verify the informationCorrect
  3. CThat the accuracy and completeness of the information is the joint responsibility of management and the practitioner
  4. DThat the practitioner takes responsibility for the information only to the extent of the regulator's format

Explanation

The illustrative compilation report states that the schedule and the accuracy and completeness of the information used to compile it are the responsibility of management. It adds that, since a compilation engagement is not an assurance engagement, the practitioner is not required to verify the information. Joint responsibility or test checks contradict this.

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