900

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Author:
Kshowalter
ID:
113369
Filename:
900
Updated:
2011-10-31 09:02:15
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Intro what are compilation review engagements
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what are compilation and review engagements
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  1. 900 IntroductionWhat Are Compilation and Review Engagements?

    900.1 Compilation and review
    engagements are similar to audit engagements in many ways. In all three
    types of engagements, the CPA performs certain procedures in accordance
    with professional standards before issuing a report on a set of client
    financial statements
    The major difference between those engagements is the level of assurance the practitioner provides in his or her report.
  2. 900.2 An audit report provides the
    • highest level of assurance. An unqualified audit opinion provides reasonable assurance
    • (a high, but not absolute, level of assurance) a set of financial
    • statements is fairly stated in all material respects in accordance with
    • GAAP or an other comprehensive basis of accounting (OCBOA)
  3. 900.3 A review report provides less
    • assurance than an audit report, but
    • also requires less work by the CPA, which results in a lower fee. A
    • review report expresses limited assurance that there are no material
    • modifications that should be made to a set of financial statements in
    • order for them to be in conformity with a particular basis of
    • accounting. This is sometimes referred to as negative assurance.
    • The procedures performed in a review (primarily inquiry and analytical
    • procedures) are substantially less in scope than those performed in an
    • audit engagement.
  4. 900.4 A compilation report does not
    • express an opinion or provide any
    • assurance about the fairness of a set of financial statements. In this
    • type of engagement, the CPA merely submits client information in a set
    • of financial statements, and is not required to perform any verification
    • procedures.

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