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

Rakesh & Co., Chartered Accountants, are engaged by the management of Kaveri Traders Pvt Ltd to assist in preparing a balance sheet and Statement of Profit and Loss for management's own internal use. Management asks whether the firm's compilation report will express an audit opinion on whether the statements comply with the stated basis of accounting. What is the correct position under SRS 4410 (Revised)?

Under SRS 4410 (Revised), a compilation is not an assurance engagement. The practitioner need not verify the information management provides, so the report expressly states that no audit opinion or review conclusion is expressed on compliance with the basis of accounting.

1. AThe report will express a limited assurance conclusion on compliance with the basis of accounting
2. BThe report will express a reasonable assurance opinion, since the firm applied accounting expertise
3. CThe report will state that no audit opinion or review conclusion is expressed, as a compilation is not an assurance engagementCorrect
4. DThe report will express an opinion only on the accuracy of the information supplied by management