Question

An accountant compiled the financial statements of a nonissuer in accordance with Statements on Standards for Accounting and Review Services (SSARS). If the accountant has an ownership interest in the entity, which of the following statements is correct? a. The accountant should refuse the compilation engagement. b. A report need notbe issued for a compilation of a nonissuer. c. The accountant should include the disclaimer "I am an owner of the entity" in the report. d. The accountant should include the statement "I am notindependent with respect to the entity" in the compilation report.

Answer 1

D) The accountant should include the statement "I am not independent with respect to the entity" in the compilation report.

Step-by-step explanation:

The accountant must state that he/she has a certain ownership interest in the company and generally they must be very specific about it, e.g. for example state how many shares they own.

This follows the full disclosure principle that states that you must include all the relevant information that may impact the reader's understanding of a financial statement.