Prior to commencing the compilation of financial statements of a nonpublic entity, the accountant should
A) Perform analytical procedures sufficient to determine whether fluctuations among account balances appear reasonable.
B) Complete the preliminary phase of the study and evaluation of the entity's internal control.
C) Verify that the financial information supplied by the entity agrees with the books of original entry and supporting documentation.
D) Acquire a knowledge of any specialized accounting principles and practices used in the entity's industry.

Question

Quizplus · Accepted Answer

Prior to commencing the compilation of financial statements, the accountant should acquire a knowledge of any specialized accounting principles and practices used in the entity's industry. This will help the accountant ensure that the financial statements are prepared in accordance with the industry's accepted accounting practices. Options A, B, and C are tasks that the accountant should perform during the compilation process, rather than before commencing it.

Prior to Commencing the Compilation of Financial Statements of a Nonpublic