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

CA Sheetal has completed a compilation of financial statements for Lotus Exports and is drafting the report. A director suggests that the report state that Sheetal checked the data given by management and found it accurate. What is the correct response under SRS 4410 (Revised)?

Sheetal should decline the wording. A compilation is not an assurance engagement, so she is not required to verify the accuracy or completeness of management's information, and the report must not imply an audit opinion or review conclusion. Accuracy and completeness remain management's responsibility.

ADecline the wording, because a compilation is not an assurance engagement and the practitioner is not required to verify the accuracy or completeness of the information providedCorrect
BAccept the wording, because the practitioner's expertise implies verification
CAccept the wording if the director signs a representation letter
DReplace it with a statement that the practitioner expresses an audit opinion on accuracy

Explanation

The illustrative report says that, since a compilation is not an assurance engagement, the practitioner is not required to verify the accuracy or completeness of the information. It also says no audit opinion or review conclusion is expressed. A representation letter cannot turn the engagement into one that gives assurance, so that option is wrong.

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CA Sheetal has completed a compilation of financial statements for Lotus Exports and is drafting the report. A director suggests that the report state that Sheetal checked the data given by management and found it accurate. What is the correct response under SRS 4410 (Revised)?

Explanation

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