A6: M-3 (Compilation Engagements)

In a Compilation Engagement, each page of the F/S should be marked:

"See Compilation Report"

A Compilation Report prepared for F/S that have Departure from Framework should include an Additional Paragraph that: (1)

1. Discloses Effects of Departure on F/S

An Engagement Letter for a Compilation Engagement should include all of the following: (8)

1. Engagement Objectives 2. Management's Responsibility 3. Accountant's Responsibility 4. Limitations of the Engagement 5. Errors, Fraud & Noncompliance may still exist 6. Applicable Financial Reporting Framework 7. Expected Form & Content of Compilation Report 8. State there may be Circumstances in which the Compilation Report may Differ than Expected

A Compilation Report prepared for F/S that Omit Substantially All Disclosures should include an Additional Paragraph that: (3)

1. Indicate & Disclose the Omission 2. State User Conclusions may be Different 3. State the Omission is NOT Intended to Mislead

Compilation Engagement: (5)

1. No Assurance is provided 2. Considered to be an Attest Service 3. Independence is NOT requires 4. Non-independence Disclosure IS required 5. NOT required to verify Accuracy/Completeness

An accountant in a Compilation Engagement should consider the Implications & Discuss any of the following with Management: (3)

1. Noncompliance with Laws & Regulations 2. Going Concern Uncertainty 3. Subsequent Events *Accountant is NOT responsible to perform procedures to detect such, but must still consider the implication if found

Additional Paragraphs in an Accountant's Compilation Report are required for any of the following: (5)

1. Special Purpose Framework F/S 2. Disclosures are Omitted 3. Accountant is NOT Independent 4. Known Departures from Reporting Framework 5. F/S Include Supplementary Information

An Accountant's Compilation Report should: (8)

1. State Management is Responsible for F/S 2. Identify the F/S Subject to the Compilation 3. Identify the Entity of the Subjected F/S 4. Specify the Date or Period Covered by the F/S 5. State Compilation was Performed under SSARS 6. State Engagement was NOT an Audit or Review 7. State NO Testing for Accuracy/Completeness 8. State that NO Assurance is Provided on F/S

A Compilation Report prepared in accordance with a Special Reporting Framework should include an Additional Paragraph that: (4)

1. State Management's Responsible for Framework 2. Indicate the Special Purpose Framework used 3. Refer to Note in F/S Describing Framework 4. State Framework used is NOT GAAP *If prepared in accordance with Regulatory or Contractual Framework, describe the purpose

An Accountant's Compilation Report does NOT contain any of the following: (3)

1. Title 2. Separate Paragraphs (in standard form) 3. Assurance

Engagement Letter

Is used to document an understanding with management regarding the services to be performed in the Compilation Engagement

What Opinions may be expressed on the Accountant's Report in a Compilation Engagement?

No Opinion may be Expressed *Withdraw instead of issuing a Qualified or Adverse Opinion

Before issuing a Compilation Report, an accountant is required to:

Read the Compiled F/S & consider whether they are appropriate in Form & free from obvious material Errors

The Accountant is required to Obtain an Understanding for all of the following when performing a Compilation: (STAFF)

S- Staff Qualifications T- Transaction Types & Frequency A- Accounting Basis used to Prepare F/S F- Form of the Accounting Records F- Financial Statement Form & Content *CPA must understand their 'STAFF'

What is the objective of a Compilation Engagement?

To apply accounting & financial reporting expertise to assist management in the presentation of F/S without undertaking to obtain or provide any assurance on the F/S