The flashcards below were created by user
BethG
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True / False: A Preparation of FS engagement is an attest engagement.
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True / False: The auditor must be independent for a Preparation of FS engagement.
- False
- Because it is a non-attest engagement.
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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.
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When performing a Preparation of FS engagement, each page of the FS must contain what statement?
That no assurance is provided
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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
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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.
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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
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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
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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
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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
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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”
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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
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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.
- False
- There is no restriction on use
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