When an accountant is not independent of an entity and is requested to perform a compilation of the entity's financial statements,the accountant
A) is precluded from accepting the engagement.
B) may accept the engagement and need not disclose the lack of independence.
C) may accept the engagement and should disclose the lack of independence, but need not indicate the reason for the lack of independence.
D) may accept the engagement and should disclose both the lack of independence and the reason for the lack of independence.

Question

Quizplus · Accepted Answer

If an accountant is not independent of an entity and is asked to perform a compilation of the financial statements of that entity, he/she can accept the engagement. However, he/she must disclose the lack of independence, but need not indicate the reason for the lack of independence. This requirement is outlined in the Statements on Standards for Accounting and Review Services (SSARS), particularly in SSARS No. 24, which became effective on June 15, 2019. The purpose of this disclosure is to inform the users of the financial statements that the accountant may have a financial interest or other relationship with the entity that could influence his/her objectivity when compiling the financial statements.

When an Accountant Is Not Independent of an Entity and Is