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

CA Joshi compiles financial statements for Lotus Exports Pvt. Ltd. for management's internal use under SRS 4410 (Revised). Management now requests that the compilation report be handed to the company's bankers for a loan appraisal. What is the appropriate response in line with the illustrative report?

CA Joshi should explain that the compilation report is intended solely for management's use and should not be distributed to other parties, because the special purpose statements may not suit other purposes. A compilation is not an assurance engagement, so limited assurance cannot be added.

1. AAllow it, since the report is a public document once signed
2. BAllow it, provided CA Joshi adds a statement of limited assurance
3. CRefuse to sign any report because compilation reports cannot be issued for internal use
4. DExplain that the report is intended solely for management's use and should not be distributed to other parties, as the statements may not be suitable for other purposesCorrect