[Anonymous]

Under the Statements on Standards for Consulting Services, which of the following statements best reflects a CPA’s responsibility when undertaking a consulting services engagement? The CPA must:

A.

not seek to modify any agreement made with the client.

B.

not perform any attest services for the client.

C.

inform the client of significant reservations concerning the benefits of the engagement.

D.

obtain a written understanding with the client concerning the time for completion of the engagement.

Answer C. Before accepting and during the performance of the engagement, the member should consider the applicability of Rule 102, Integrity and Objectivity. If the member believes that he or she can perform the services with objectivity, the member would not be prohibited from accepting the engagement. The member should also consider informing the company and the executives of possible results of the engagement prior to accepting the engagement.

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If a CPA is performing consulting services, it is not independent with the client. Therefore, the CPA can’t perform attest services. Then how come the answer is C instead of B?

[Anonymous]

I would go with C because, yes they cannot perform attest services, but C sounds like its all inclusive of the services to be and not be provided to the client. I think C would capture the fact they cannot perform the attest services and would also list any other restrictions, details, etc. I would think of C as the engagement letter, outlining the scope and extent of the services.

[Anonymous]

Be wary of any answer that “always, never, only”.

[Author]

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