When accountants agree to perform a compilation or review of unaudited financial statements,the best way to avoid clients misunderstanding the nature of the work is to describe it completely in
A) An engagement letter.
B) The auditors' opinion.
C) A report to the clients' board of directors at the close of the engagement.
D) A management letter to the board of directors' audit committee.

Question

Quizplus · Accepted Answer

An engagement letter is a written agreement between the accountant and the client that outlines the scope of the work to be performed, the responsibilities of each party, and the fees to be charged. By describing the nature of the work completely in the engagement letter, the accountant can ensure that the client understands the limitations of the service being provided and does not have unrealistic expectations about the level of assurance being given.

When Accountants Agree to Perform a Compilation or Review of Unaudited