Question

A CPA who performs primary actuarial services for a nonissuer client normally is precluded from expressing an opinion on the financial statements of that client if:

A) Client is a small business
B) CPA prepared an actuarial report using assumptions not approved by the client.
C) Actuarial services are unrelated to financial reporting
D) Client is a publicly traded company

Answer 1

The correct answer is option C. If the actuarial services are unrelated to financial reporting, the CPA cannot express an opinion.

Step-by-step explanation:

A CPA who performs primary actuarial services for a nonissuer client normally is precluded from expressing an opinion on the financial statements of that client if the actuarial services are unrelated to financial reporting (option C).

Actuarial services involve the analysis of statistical data and financial risks for insurance companies, while financial reporting focuses on the presentation of financial information in financial statements. If the actuarial services are not related to financial reporting, the CPA does not have the necessary expertise to express an opinion on the financial statements.