A6 - Accounting and review service engagements, interim reviews, & ethics and professional responsibilities

Question 1

Compilation Engagement

Answer 1

Use expertise to assist mgmt with preparing FS, without providing assurance.

Question 2

Statements on Standards for Accounting & Review Services (SSARS)

Answer 2

Applicable to: Preparation, Compilation, & Review (negative assurance)(FS not audited) engagements.

•Attest-report
•Non-attest-no report
•Assurance-opinion(reasonable)/conclusion(limited)
•No assurance-no opinion/conclusion

“Must” or “Should” verbiage for accountants responsibility.

Question 3

Analytical Procedures

Answer 3

Involve developing an expectation by comparing records to expectations.

Question 4

Prospective Financial Engagements

Answer 4

Forecasts - General or limited use

Projections - Limited users

-Engagements:
—Examination - completeness, reasonableness of assumptions.
—Compilation - computation accuracy of statements, not reasonableness of assumptions.
—Agreed upon procedures - users agree on procedures, limited attestation procedures.

Question 5

Interim Financial Reporting

Answer 5

-Make inquiries about actions taken at directors/stockholders meetings. Read minutes of meetings.

-Obtain evidence that interim financial info agrees with records.

FS are Mgmts responsibility.

Analytical procedures, inquiry.

Substantially less in scope than audit.