Expressing an opinion on whether the financial reports are prepared in accordance with an applicable financial reporting framework is the purpose of
A) a compilation.
B) a review.
C) a consulting engagement.
D) an audit.

Question

Quizplus · Accepted Answer

The purpose of an audit is to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework, which includes verifying the accuracy and completeness of the financial statements. A compilation involves presenting financial information in the form of financial statements, without providing any assurances as to whether they are free from material misstatement. A review involves performing analytical procedures and making inquiries to provide limited assurance that there are no material modifications that should be made to the financial statements. A consulting engagement involves providing expert advice or specialized services to a client, but does not involve expressing an opinion on financial statements.

Expressing an Opinion on Whether the Financial Reports Are Prepared