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Certified Management Accountant

Real-Life Activities

Real-Life Communication -- Solution

You're reading through your association's code of ethics to find out if you can prepare a financial statement without an audit.

In section 1.2.2, the code states that as a CMA you can not prepare an audit but you can prepare financial statements: "No certified member shall use the designation CMA when signing an audit certificate but may use the designation CMA when signing financial statements prepared without audit."

When you sign the financial statements, you must clearly note that the statements were not an audit. You must also state that: "The accompanying balance sheet and income statements have been prepared by me from the books and records of the company and from information given to me. I did not perform an audit of the accounts and, accordingly, am not in a position to express an opinion on these financial statements."

Another condition that you must follow is section 1.2.4. You must show all the facts of the company's financial situation so that your opinion is justified and your statement is not misleading. You must also state how reliable your predictions are for the company's future financial performance.

"In preparing the financial statements...a member shall disclose all material facts known to him or her so as to make such financial statements not misleading, will require all and sufficient information to warrant expression of opinion. In a presentation of a forecast of future results a member will indicate the degree of reliability and precision of such forecast to avoid any misleading interpretation of such forecast."


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