[moscheck]

Please see below question from my list of trouble questions in Surgent for AUD. Why wouldn’t this be a situation for the external accountant to withdraw from the engagement? There are no qualified, disclaimer or adverse opinions for an engagement to prepare FS. So why would they disclose if the management refuses to correct? I would believe it’d be to withdraw? I chose answer B. Correct answer is A. Any tips or tricks to not get flubbed up on these questions and when should an accountant WITHDRAW vs DISCLOSE KNOWN DEPARTURES. Please explain like I’m a noob:

If an external accountant is engaged to prepare financial statements in accordance with the Statements on Standards for Accounting and Review Services (SSARSs), and such financial statements contain a known departure from the applicable financial reporting framework that management refuses to correct, the accountant should:

A. disclose the known departure on the face of the financial statements or footnotes.

B. withdraw from the engagement.

C. issue a compilation report instead, with a known departure modification.

D. take no specific action, as no report is required.

[monikernc]

As I like to say, everything in AUD is based on the standards. First know what type of engagement. This is a review. You will find the reason for the correct answer in .56 of the attached standard for a review – note the heading of the section is part of the question. When in doubt, find and read the standard.
https://www.aicpa.org/content/dam/aicpa/research/standards/compilationreview/downloadabledocuments/ar-c-00090-a.pdf

You need to also read the A sections you are referred to in the numbered paragraphs to better understand when you would withdraw.

AUD - 93
BEC - 82
FAR - 76
REG - 88

How have you been?
Ninja book and MCQs and the forum, all first try! 2016
Licensed State of Montana April Fool’s Day 2020
State of Colorado June 2020 - AICPA Ethics 93
Experience was the worst part of the journey for me. You?
If you want things to change you have to do something different.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Author]

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