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

Sunrise Traders Pvt. Ltd. asks CA Meera to help prepare its financial statements from the books and records the company provides, for management's internal use only. Meera is not asked to give any assurance. Under SRS 4410 (Revised), which statement correctly describes her report?

The compilation report states that, since a compilation is not an assurance engagement, the practitioner need not verify the accuracy or completeness of the information provided, and expresses neither an audit opinion nor a review conclusion. It is meant for management's use and is not suited to third-party reliance.

  1. AIt expresses an audit opinion on whether the statements give a true and fair view
  2. BIt states that, as a compilation engagement is not an assurance engagement, she is not required to verify the accuracy or completeness of the information provided and expresses no audit opinion or review conclusionCorrect
  3. CIt expresses limited assurance through a negative-assurance review conclusion
  4. DIt is freely distributable to banks and other third parties relying on the statements

Explanation

SRS 4410 (Revised) deals with assisting management in preparing and presenting historical financial information without obtaining any assurance. The illustrative report says the practitioner is not required to verify accuracy or completeness and gives no audit opinion or review conclusion. A negative-assurance conclusion belongs to a review, not a compilation.

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