Question

At the conclusion of a compilation engagement, _______.

A. The auditor provides a verbal report to management only.
B. The auditor attests to the accuracy and fairness of the financial statements.
C. The CPA provides a written compilation report to the client.
D. The auditor uses the compilation report to assist the client in raising funds in capital markets.

Answer 1

The conclusion of a compilation engagement involves a CPA providing a written compilation report to the client, with no assurance provided on the accuracy of the financial statements. The correct option is C.

Step-by-step explanation:

At the conclusion of a compilation engagement, the CPA provides a written compilation report to the client. This process involves taking the financial data provided by a client and arranging it into a format that complies with the applicable accounting framework.

However, the CPA does not provide assurance on the financial statements, meaning they do not attest to the accuracy or fairness of the financial statements, which differentiates a compilation engagement from an audit or review.