Preparation Engagements (SSARS) M2

Question 1

What should be flagged on each page of the f/s in a preparation engagement?

Answer 1

“no assurance is provided.”

Question 2

What does the Auditor do if management precludes them from stamping the financials with “No assurance provided”?

Answer 2

• It would be appropriate for the accountant to issue a disclaimer making it clear that no assurance is provided.
• The accountant could also choose to perform a compilation engagement or withdraw from the engagement altogether.
• No opinion/no assurance/no independence is issued or required in a preparation engagement.

Question 3

What goes in the engagement letter of a preparation engagement?

Answer 3

• Management is responsible for the accuracy and completeness of the accounting records, which includes the accuracy of significant judgments provided to the accountant who has been engaged to prepare the financial statements.

Question 4

What is the accountant responsible for doing in a preparation engagement?

Answer 4

• The accountant, not management, is responsible for the preparation of the financial statement disclosures in a preparation engagement.
• No assurance of the financial statements is given in a preparation engagement.
• The accountant, not management, is responsible for including a description of the financial reporting framework on the face of the financial statements or in a note to the financial statements when preparing financial statements in accordance with a special purpose

Question 5

What type of engagement is a preparation?

All other services are Attest services with reports.

Answer 5

Non-Attest/no assurance/ no report to issue.