Different Types of Engagements Flashcards
What does SSARS stand for?
Standards for Accounting and Review Services
What is the SSARS applicable?
when the CPA is associated with the financial statements of a private company, but that association is something less than a full-scope audit engagement
What is a Compilation?
This occurs when the CPA is engaged simply to assemble into financial statement format the financial records of a private company, without expressing any degree of assurance on the reliability of those financial statements
What is a Review?
This occurs when the CPA is engaged to provide a lower level of assurance (relative to that of an audit) on financial statements of a private company by performing limited procedures, including reading the financial statements, performing analytical procedures, and making appropriate inquiries of client personnel
What does SSAE stand for?
Standards for Attestation Engagements
When is the SSAE applicable?
These are applicable when the CPA provides assurance about written representations or subject matter other than historical financial statements e.g., management may make representations about its superior product performance that may be made more reliable by the CPA’s independent verification and report
Responsibilities vary for different types of engagements, “Understanding with the Client” is important, why?
to establish an understanding with the entity involved as to the services to be rendered and the parties’ respective responsibilities. The CPA must document that understanding in a written engagement letter between the CPA and the client entity
Responsibilities vary for different types of engagements, “Level of Assurance” has 3 different levels, what are they?
1 Audit -conveys a high level of assurance about the reliability of the financial statements
2 Review -conveys a lower (i.e., “moderate”) level of assurance about financial statements (private co)
3 Compilation -conveys no assurance about the reliability of the financial statements (private co)
