Accounting & Review Services (SSARS) Flashcards
What are the types of SSARS engagements?
Preparation engagement
Compilation engagement
Review engagement
What is the objective of a preparation engagement?
Prepare FS pursuant to a specified financial reporting framework (GAAP)
What is the objective of a compilation engagement?
Apply accounting & financial reporting expertise to assist management in the presentation of FS.
What is the objective of a review engagement?
Obtain limited assurance (negative assurance) that there are no material modifications that should be made to the FS in order for the statements to be in conformity with the applicable financial reporting framework.
What a preparation engagement used for?
May be used by an owner to manage the business. The way CFO and Controller is responsible for preparation of financial statements, in this it is outsourced to an accountant.
What is a compilation engagement used for?
May be used by lenders or outsiders who would prefer a report from a CPA although the same is without any assurance.
What is a review engagement used for?
May be used lenders or outsiders who would prefer a report from a CPA with a basic level of assurance.
What is the independence requirement of a preparation engagement?
Independence is not required. Nor are you required to disclose lack of independence.
What is the independence requirement of a compilation requirement?
Independence is not required but lack of independence needs to be disclosed.
What is the independence requirement of a review engagement?
Independence is required.
Is an engagement required for a preparation engagement?
Yes. Required written understanding with the client.
Is an engagement required for a compilation engagement?
Yes. Required written understanding with the client.
Is an engagement required for a review engagement?
Yes. Required written understanding with the client.
What procedures are necessary in a preparation engagement?
Obtain knowledge and understanding of business and industry.
Not responsible to obtain evidence.
What procedures are necessary in a compilation engagement?
Obtain knowledge and understanding of business and industry.
Not responsible to obtain evidence. However, should read the FS for appropriateness and determine whether the FS are free of obvious material misstatements.
What procedures are necessary in a review engagement?
Obtain knowledge and understanding of business and industry.
Perform procedures to accumulate evidence to provide a reasonable basis for providing limited assurance.
Read the FS to ensure they are free of material errors and are in appropriate form.
Inquiries.
Analytical procedures.
Management representation letter.
`What level of assurance does a preparation engagement provide?
No assurance.
What level of assurance does a compilation engagement provide?
No assurance.
What level of assurance does a review engagement provide?
Limited assurance (negative assurance)
What is marked on each page of the FS in a preparation engagement?
No assurance provided.
What is marked on each page of the FS in a compilation engagement?
See Accountant’s Compilation Report.
What is marked on each page of the FS in a review engagement?
See Accountant’s Review Report.
Is a report required in a preparation engagement?
No
Is a report required in a compilation engagement?
Yes. Issue an Accountant’s Compilation Report
Is a report required in a review engagement?
Yes. Issue an Accountant’s Review Report.
