What role does the Accounting and Review Services Committee serve?

The Accounting and Review Services Committee (ARSC) serves a vital role in establishing and promoting standards related to the preparation and reporting of unaudited financial statements, particularly those issued by non-public entities. This includes guidance for practitioners on reviews and compilations, which differ significantly from audits in terms of depth of scrutiny and assurance provided. Therefore, the committee’s focus on setting standards for unaudited financial statements ensures that they are consistent and reliable, thereby enhancing the quality of financial reporting outside the audit context.

The other options revolve around functions that fall outside the specific mandate of the ARSC. Issuing audit opinions pertains to the independent auditing process, which is primarily governed by other bodies such as the AICPA’s Auditing Standards Board. Determining the independence of auditors is also a function that does not specifically fall within the purview of the ARSC, as this responsibility is typically addressed by audit regulatory bodies and independence standards that apply to auditors conducting audits. Lastly, regulating public company audits is primarily the responsibility of the Public Company Accounting Oversight Board (PCAOB), which oversees the audits of public companies to protect investors’ interests. Thus, the focus of the ARSC on promulgating standards for unaudited financial statements makes the correct answer