The limitation on professional responsibilities of CIAs when they are associated with and financial statements are often misunderstood. These misunderstandings can be reduced substantially if CIAs carefully follow professional pronouncements in the course of their work and take other appropriate measures. Required: The following list describes for situation CIAs may encounter in their association with and preparation of unaudited financial statements. Briefly discuss the extent of the CIAs responsibilities and, if appropriate, the actions to be taken to minimize misunderstandings. Identify your answers to correspond with the letters in the following list. a. A CIA was engaged by telephone to perform accounting work including the compilation of financial statements. His client believes that the CIA has been engaged to audit the financial statements and examine the records accordingly. b. A group of business executives who own a firm managed by an independent agent engage Linda Lopez, a CIA, to compile quarterly unaudited financial statements for them. The CIA compiles the financial statements from information given to her by the independent agent. Subsequently, the business executives find the statements were inaccurate because their independent agent was embezzling funds. The executives refuse to pay the CIAs fee and blame her for allowing the situation to go undetected, contending that she should not have relied on representations from the independent agent. c. In comparing the trial balance with the general ledger, a CIA finds an account labeled Audit Fees in which the client has accumulated the CIAs quarterly billings for accounting services including the compilation of quarterly unaudited financial statements. d. To determine appropriate account classification. John Day, CIA reviewed a number of the clients invoices. He noted in his working papers that some invoices were missing but did nothing further because he though they did not affect the unaudited financial statements he was compiling. When the client subsequently discovered the invoices were missing, he contended that he CIA should not have ignored the missing invoices when compiling the financial statements and had a responsibility to at least inform him that they were missing.