Compilation & review Engagements Flashcards
What is a compilation engagement?
an engagement in which a public accountant receives information from a client and arranges it into the form of a financial statement
Is there any assurance provided?
No assurance provided - just that information is arithmetically correct
Conditions for accepting a compilation engagement
an engagement in which a public accountant receives information from a client and arranges it into the form of a financial statement
What should the communication include in an compilations engagement
Each page should be marked “Unaudited - See notice to Reader”
Notice to Reader should state:
• state that the public accountant compiled the statement from information provided by management
- state that the public accountant has not performed an audit or a review on such information
- caution readers that the statement may not be appropriate for their purposes
- not express any form of opinion
What is a review engagement
a lower level of assurance than an audit and therefore involves less work, which in turn will be less costly for the client.
provides limited assurance
How is evidence obtained for a review engagement>
inquiry, discussion and analytical procedures rather than detailed substantive testing or tests of controls
Required steps in planning a review engagement
Acceptance and continuance Procedures
Determine materiality
Understanding of the entity
Design procedures
Steps required in performing a review engagement
a. Perform, supervise, and review the work performed
b. Evaluate the adequacy and sufficiency of the evidence obtained
c. Design additional procedures where statements may be materially misstated.
d. Document results of work performed and conclusions reached.
