Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

When preparing a written report for a specific transaction, what statement should an accountant include?

1. The guidance is for management use only.

2. Differences in facts may alter the report's conclusions.

3. The engagement conforms with Consulting Services standards.

4. Nothing violates GAAP in the financial reporting framework.

The correct answer is: Differences in facts may alter the report's conclusions.

Including a statement that "Differences in facts may alter the report's conclusions" is crucial in the context of preparing a written report for a specific transaction. This statement emphasizes the importance of the information used to reach conclusions in the report. Accountants often assess transactions based on the factual circumstances surrounding them. If there are changes or discrepancies in the facts, the resulting analysis and conclusions could be significantly affected; thus, this statement serves as a cautionary note to users of the report. Moreover, it adds a layer of transparency, indicating that the accountant's conclusions may not be applicable if the facts are incomplete or subsequently change. This principle aligns with professional standards that urge accountants to be mindful of the limitations of their conclusions based on the information available at the time of the report’s preparation. In contrast, the other statements, while they may hold significance in different contexts, do not convey the same critical reminder about the dependency of conclusions on factual accuracy and completeness.