Final Jeopardy
An accountant has been engaged to compile pro forma financial statements. During the accountant’s acceptance procedures, it is discovered that the accountant is not independent with respect to the company. What action should the accountant take with regard to the compilation?
A. The accountant should discuss the lack of independence with legal counsel to determine whether it is appropriate to accept the engagement.
B. The accountant should disclose the lack of independence in the accountant’s compilation report.
C. The accountant should withdraw from the engagement.
D. The accountant should compile the pro forma financial statements but should not provide a compilation report.
B. The accountant should disclose the lack of independence in the accountant’s compilation report.