Smith, CPA, has been asked to issue a review report on the balance sheet of Cone Company, a nonpublic entity, and not on the other related financial statements. Smith may do so only if
- Smith compiles and reports on the related statements of income, retained earnings, and cash flows.
- Smith is not aware of any material modifications needed for the balance sheet to conform with GAAP.
- The scope of Smith’s inquiry and analytical procedures is not restricted.
- Cone is a new client and Smith accepts the engagement after the end of Cone’s fiscal year.