True / False: A Preparation of FS engagement is an attest engagement.
False
It is non-attest
True / False: The auditor must be independent for a Preparation of FS engagement.
False
Because it is a non-attest engagement.
SSARS does not apply when an accountant prepares FS for these situations...
Inclusion in written personal financial plans
The accountant is engaged to perform an audit, review, or compilation of those FS
Solely for submission to taxing authorities
In conjunction with litigation services that involve pending or potential legal or regulatory proceedings
In conjunction with business valuation services.
When performing a Preparation of FS engagement, each page of the FS must contain what statement?
That no assurance is provided
True / False: The auditor must have knowledge of the client’s industry prior to accepting the engagement to prepare FS.
False
The accountant may accept the engagement, but must have knowledge prior to actually preparing the FS
True / False: The accountant must provide the name of the firm on each page of the FS along with the disclaimer of assurance statement.
False
The accountant’s name or firm name is not required.
The accountant is unable to include the “no assurance provided” disclaimer on each page of the FS. What other options are available to the accountant?
Issue a disclaimer paragraph OR
Perform a compilation engagement
The client uses a special purpose framework in an engagement to prepare the FS. How is this information disclosed?
A description of the financial reporting framework must be stated on the face of each FS, OR
In a note to the FS
True / False: The accountant suspects a departure from the applicable reporting framework. The accountant is required to inquire of management regarding the issue.
False
It is permitted, but not a requirement
The accountant suspects a departure from the applicable reporting framework, inquires of management, and management confirms the departure. What options are available to the accountant?
The accountant should disclose the material misstatement in the FS, OR
Consider withdrawing
The client does not want substantially any disclosures on the FS that are typical of the reporting framework. What options are available to the accountant?
The accountant must use professional judgment to determine if the request is intended to mislead anyone who might use the FS.
If the intent is not to mislead, then disclose the omission on the FS, OR
Label the notes as follows: “Selected Information – Substantially all disclosures required by [applicable financial reporting framework] are not included”
What documentation should be included in a Preparation of FS engagement?
The engagement letter
A copy of the FS prepared by the accountant
Any significant findings or issues
Other significant evidence, such as discussions with mgmt
True / False: Because the FS prepared during an Preparation of FS engagement were not reviewed or audited, and no assurance is provided, the FS must be restricted in use only to the entity.
