in connection with a proposal to obtain a new audit client a cpa in public practice 602427

In connection with a proposal to obtain a new audit client, a CPA in public practice is asked to prepare a report on the application of accounting principles to a specific transaction. The CPA’s report should include a statement that

1. The engagement was performed in accordance with Statements on Standards for Accounting and Review Services.
2. Responsibility for the proper accounting treatment rests with the preparers of the financial statements.
3. The evaluation of the application of accounting principles is hypothetical and may not be used for opinion-shopping.
4. The guidance is provided for management’s use only and may not be communicated to the prior or continuing auditor.