During an engagement to review the financial statements of a nonissuer, an accountant becomes aware that several leases that should be capitalized are not capitalized. The accountant considers these leases to be material to the financial statements. The accountant decides to modify the standard review report because management will not capitalize the leases. Under these circumstances, the accountant should：

　　a. Issue an adverse opinion because of the departure from GAAP.

　　b. Express no assurance of any kind on the entity's financial statements.

　　c. Disclose the departure from GAAP in a separate paragraph of the accountant's report.

　　d. Emphasize that the financial statements are for limited use only.

　　答案：C

　　Explanation

　　Choice “c” is correct. Failure to properly capitalize leases that the accountant considers material to the financial statements is a departure from GAAP. If management will not capitalize the leases, the accountant should modify the standard review report or withdraw from the engagement. If modification to the report is sufficient to disclose the departure from GAAP, then the accountant may modify the review report.

　　Choice “a” is incorrect. An opinion is not issued with a review report. Instead, the report may be modified to disclose the departure from GAAP.

　　Choice “b” is incorrect. The accountant may still provide limited assurance with respect to the entity's financial statements in the review report, as long as the departures from GAAP are disclosed. An additional paragraph should be added at the end of the review report and should state, “Based on my review, except for the issue noted in the Known Departures From Accounting Principles Generally Accepted in the United States of America paragraph, I am not aware of any material modifications…”

　　Choice “d” is incorrect. There is no need for the auditor to restrict the use of the financial statements.