Audit Procedures for Compilation Engagements:

Compilation engagements involve the accountant preparing financial statements based on information provided by the client without providing any assurance or verification on the accuracy or completeness of the information. Unlike audits or reviews, where the auditor provides assurance on the financial statements, compilation engagements focus solely on organizing financial information into a structured format.

Key Characteristics of Compilation Engagements:

Limited Involvement: In compilation engagements, the accountant's role is limited to organizing the client's financial information into financial statements without performing any substantive procedures to verify the accuracy or completeness of the information provided.

No Assurance Provided: Unlike audits or reviews, where the auditor provides assurance on the financial statements, compilation engagements do not involve providing any form of assurance or verification on the financial information presented in the financial statements.

Client's Responsibility: It is the client's responsibility to provide the accountant with accurate and complete financial information. The accountant relies solely on the information provided by the client and does not perform any independent verification.

Limited Distribution: The financial statements prepared in compilation engagements are typically intended for internal use by management or other specified users and are not suitable for external use or distribution to third parties.

Question:

In compilation engagements, what level of assurance does the accountant provide on the financial statements?

A$)$ Reasonable assurance

B$)$ Limited assurance

C$)$ Moderate assurance

D$)$ No assurance