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| Clark, CPA, compiled and properly reported on the financial statements of Green Co., a nonpublic entity, for the year ended March 31, year 1. These financial statements omitted substantially all disclosures required by generally accepted accounting principles (GAAP). Green asked Clark to compile the statements for the year ended March 31, year 2, and to include all GAAP disclosures for the year 2 statements only, but otherwise present both years’ financial statements in comparative form. What is Clark’s responsibility concerning the proposed engagement? A. Clark may report on the comparative financial statements provided Clark updates the report on the year 1 statements. B. Clark may not report on the comparative financial statements because the year 1 statements are not comparable to the year 2 statements. C. Clark may report on the comparative financial statements provided the year 1 statements do not contain any obvious material misstatements. D. Clark may report on the comparative financial statements provided an explanatory paragraph is added. |