Ron Ward, a member, is the sole owner of Ron Ward, CPA. Ron Ward has one bookkeeper and one accounting assistant working with him and neither is a CPA. Ron Ward, CPA prepares compiled financial statements for Packem Manufacturing Company and has done so for the past four years. Joe Packem, the owner of Packem Manufacturing Company, has asked Ron Ward if he has a client or is aware of anybody who would like to purchase some unneeded equipment from the company and has engaged the firm to help him find a buyer for this equipment. As part of the agreement, Packem Manufacturing Company will pay Ron Ward, CPA a commission of 5% of the selling price of the equipment if the firm finds a buyer and the sale is completed. At the present time, no buyer has been found and no sale has been completed. Which of the following statements is true regarding the performance of both the compilation and equipment selling engagements at the same time?

Incorrect Response: None of the above statements are true. It is not correct that none of the answer options are true. If Ron Ward, CPA expects or reasonably expects that a third party will use the compiled financial statements, the report must disclose the firms lack of independence. (Chapter 5 Section 1.520.001.01)