Audit Ch 12 Compilation And Review

Front 1

Audit - Standard / Evidence / Level of Assurance

Back 1

(1) SAS (2) I/C, Corroborative Inquiries, Analytical Procedures, Detect Material Fraud (3) Opinion // Must be independent

Front 2

Review - Standard / Evidence / Level of Assurance

Back 2

(1) SSARS - Statement of Standards for Accounting & Review Services (2) Read R/S to see if free from obvious material errors, inquiries, analytical procedures (3) Negative Assurance 
Review Must be Independent

Front 3

Review is an

Back 3

attest engagement
Compilation - Standard / Evidence / Level of Assurance (1) SSARS (2) Read F/S and see if free from obvious material errors (3) Disclaimer

Front 4

For compilation, do not have to be

Back 4

independent; must disclose lack of independence; reason not required but may give general description of reason.

Front 5

Engaged to Compile F/S of Nonpublic Entity

Back 5

(1) Read F/S (2) See if free of obvious material misstatements (smell tests) (3) Disclaim [no assurance] (4) Disclose if not independent (5) No Title required on the report (6) Engagement letter is required

Front 6

[Accountant’s Compilation Report – Title optional]

Back 6

(1) Management is responsible for the accompanying financial statements of XYZ Company…(2)We have performed compilation engagements in accordance with SSARS… (3) I (We) DID NOT AUDIT OR REVIEW the F/S…Accordingly, we do not express an opinion…

Front 7

If Compilation Finds a GAAP Departure

Back 7

Describe departure(s) and effects if known

Front 8

Example of GAAP departure

Back 8

Accounting principles generally accepted in the United States of America require that land be stated at cost. Management has informed me (us) that XYZ Company has stated its land at appraisal value and if GAAP had been followed…

Front 9

If Mgt. omits substantially all disclosures/footnotes

Back 9

Add paragraph ; (1) State clearly substantially all disclosures are omitted (2) Could influence user decisions (3) F/S not designed for those not informed about such matters (As long as you do not believe client is trying to mislead anyone by omitting these items)

Front 10

Modify Compilation report if F/S do not include

Back 10

(1) SPF description (2) Summary of significant accounting policies (3) Adequate description of how SPF differs from GAAP [do not quantify the effects]

Front 11

Compilation of Nonpublic Entity - Withdraw if mgt. does not

Back 11

(1) Provide records or info. that CPA requests (2) Make appropriate revisions or disclose departures & CPA does not put them in the report - Inform mgt. and consult legal counsel

Front 12

Review of Nonpublic Entity

Back 12

(1) Read F/S - free of obvious material misstatements from the Framework (2) Negative assurance (3) Must be independent (4) Engagement letter is required (5) Mgt. representation letter required, CEO & CFO (5) May need Emphasis or Other Matter π

Front 13

Obtain review evidence for

Back 13

(1) Read F/S—free of obvious material errors (2) Analytical Procedures (3) Inquiries and other review procedures (compilation PLUS)

Front 14

If Review Is Incomplete

Back 14

Can’t perform the inquiries or analytical procedures, or Client doesn’t sign the mgt. representation letter. Can’t issue review report, then consider if compilation report is appropriate

Front 15

Review Report, GAAP Departure

Back 15

(1) Introductory paragraph (2) Management responsibility paragraph (3) Accountant’s responsibility paragraph (4) Accountant’s Conclusion (5) Known Departures from GAAP in the USA paragraph

Front 16

Special Purpose Framework Paragraph - Include paragraph

Back 16

(1) That F/S are prepared on SPF (2) Refer to note describing SPF (3) State that SPF is basis of accounting other than GAAP

Front 17

Public Entity / Audited FS

Back 17

Opinion - PCAOB F/S & IC

Front 18

Public Entity Unaudited F/S

Back 18

Disclaimer - SAS

Front 19

Non-public entity Audited FS

Back 19

Opinion SAS (GAAP or Special Purpose Framework)

Front 20

Non-public entity Unaudited FS

Back 20

Review - SSARS, Compilation - SSARS

Front 21

SSARS applies to

Back 21

Review, Compilation

Front 22

When standard does not apply to preparing F/S

Back 22

Nonattest service

Front 23

Engaged to Prepare F/S Without Reporting

Back 23

(1) Service below a compilation (2) Can apply to interim F/S (3) It is a Nonattest Service; Don’t have to determine if CPA is independent (4) CPA’s name is not required to be included on F/S (5) Mark each page “no assurance is provided” If can’t do so Issue a disclaimer or Perform a compilation

Front 24

Prepare F/S Without Reporting - If F/S have departure

Back 24

correct it or disclose in F/S, notes, or on face of FS

Front 25

If on SPF (cash, tax…)

Back 25

Describe on F/S face [Statement of Assets & Liabilities – Cash Basis] or In a footnote

Front 26

Prepare F/S without reporting - Engagement letter

Back 26

is required

Front 27

If F/S omit substantially all disclosures

Back 27

disclose this fact [as long as client is not trying to mislead]

Front 28

Highest Level of Assurance

Back 28

Opinion > Negative Assurance > Disclaimer > Cannot provide the service