The accountants 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 include the disclaimer "I am an owner of the entity" in the report.
B. A report need not be issued for a compilation of a nonissuer.
C. The accountant should include the statements "I am not independent with respect to the entity"
D. The accountant should refuse the compilation engagement.
Answer:C
C is corrent because a compilation may be performed, but the report must indicate that the accountant is not independent.
A is incorrect because while the lack of independence must be indicated explicitly, the accountant may or may not choose to indicate the reason for the lack of independence.
B is incorrect because a report must be issued when third-party reliance is anticipated.
D is incorrect because a compilation may be performed.