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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Specific assignments

Ferris & Partners is asked to compile financial information for Oakley Ltd, a small private company, under ISRS 4410 (Revised). Management supplies the accounting records and the firm prepares the statements using its professional expertise. Which statement about the compilation report is correct?

A compilation report under ISRS 4410 (Revised) gives no assurance. The accountant uses accounting expertise to help management prepare the information but does not test or verify it, so no opinion or conclusion on its fairness or accuracy is expressed.

  1. AIt expresses limited assurance that the information is free from material misstatement
  2. BIt expresses an opinion on whether the information is fairly presented
  3. CIt gives no assurance on the information compiledCorrect
  4. DIt confirms that sufficient appropriate evidence supports the records

Explanation

A compilation engagement is not an assurance engagement. The accountant uses expertise in accounting and financial reporting to assist management but does not verify the information or express assurance. The report therefore states that no assurance is given.

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