Topic 9 (Other Assurance and Non-Assurance Services)

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Review Engagement - Professional Standards (3)

1. Adequate planning, proper execution, and proper supervision of assistance 2. Possess sufficient KNOWLEDGE OF BUSINESS - For intelligent inquiry and assessment 3. Assess whether info is PLAUSIBLE using... - Inquiry (analysis) - Info supplied by organization - Additional procedures - Framework of appropriate criteria

Compilation Engagement - Professional Standards (4)

1. Adequate technical TRAINING and PROFICIENCY in accounting 2. Complete with DUE CARE 3. Work adequately PLANNED and properly EXECUTED 4. Proper SUPERVISION of assistants

Compilation Engagement - Procedures (3)

1. Assemble information 2. Ensure accuracy (arithmetically correct) 3. IF false/misleading F/S... - Withdraw from engagement

Types of Engagement (3)

1. Audit (HIGH assurance) - Positive Assurance - "In our opinion..." 2. Review (MIDDLE assurance) - Negative Assurance - "Nothing has come to our attention" 3. Compilation (NO assurance) - Tax Purposes - "No attempt to verify accuracy or completeness of information"

Review Engagement - Reporting Standards (3)

1. Indicate SCOPE and NATURE of review - Distinguish it from audit 2. Indicate whether anything causes you NOT TO BELIEVE INFO is in accordance with criteria - Or no assurance 3. Explain RESERVATIONS - Determine effects

Review Engagement - Procedures (5)

1. Obtain KNOWLEDGE of client's business 2. Determine MATERIALITY 3. Make INQUIRIES of staff concerning I/C 4. Perform ANALYTICAL PROCEDURES 5. Inquire of management concerning info RECEIVED and info being REPORTED ON

Review Engagement (3)

F/S reviews... i.) Provide SOME ASSURANCE - For clients that do not require audit - Includes: Inquiry, Analysis (e.g. Ratios), Discussion - Does Not Include: Bank Confirmations, Vouching, Inspection ii.) Done for other purposes - e.g. Verifying sales for lease agreements iii.) Get sued for this more often than Audits - Do not vouch in reviews

Review Engagement - Review Report

Similar to Audit Report... i.) Paragraph 6 - "Audit" replaced by "Review"

Compilation Engagement (2)

i.) Bookkeeping services that lead to completion of F/S - Independence NOT required (should have NOTE disclosure) ii.) Provide NO ASSURANCE - Help accountant with tax returns

Compilation Engagement - Notice to Reader (3)

i.) What F/S were compiled (e.g. B/S, statement of income, cash flow, retained earnings) - Based on info provided by management ii.) NOT performed an audit or review engagement - Express no assurance iii.) Caution readers


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