Before reissuing a compilation report on the financial statements of a nonissuer for the prior year, the predecessor accountant is required to
A. Verify that the reissued report will not be used to obtain credit from a financial institution.
B. Compare the prior year’s financial statements with those of the current year.
C. Review the successor accountant’s working papers for matters affecting the prior year.
D. Make inquiries about actions taken at meetings of the board of directors during the current year.
Answer:B
B is corrent because SSARS indicate that a predecessor should read the statements, compare them with those previously issued and those of the current period, and obtain a letter from the successor relating to the statements.
A is incorrect because the reissued report ordinarily may be used to obtain credit.
C is incorrect because the predecessor accountant need not review the successor accountant’s working papers.
D is incorrect because such inquiries are not required.