Which one of the following meets the definition of an examination?
A) a compilation of the financial statements
B) an audit of the financial statements
C) a review of the financial statements
D) preparing the annual tax returns

Question

Quizplus · Accepted Answer

An examination refers to an audit of the financial statements which includes obtaining and evaluating evidence supporting the amounts and disclosures in the financial statements. A compilation (Option A) involves presenting financial information without providing any assurance, while a review (Option C) involves limited assurance. Preparing annual tax returns (Option D) involves tax compliance work and does not meet the definition of an examination.

Which One of the Following Meets the Definition of an Examination