1、Feature TopicSkepticism Applies to All Types of Engagements14.1 Other Assurance EngagementsReview and Compliance ServicesMany non-public companies have their financial statements reviewed or complied by a CPA, instead of having them audited.The standards for compilations and reviews of financial sta

2、tements are called Statements on Standards for Accounting and Review Services (SSARS).Because review service and compilation services provide less assurance than audits, it is important that the accountant establish an understanding with the client, preferably in a written engagement letter.Review a

3、nd Compliance ServicesA review service engagement is designed to allow the accountant to express limited assurance that the financial statements are in accordance with GAAP.Procedures Suggested for ReviewsObtain knowledge of the accounting principles and practices of the clients industry.Obtain know

4、ledge of the client.Make inquiries of management.Perform analytical procedures.Obtain letters of representation.Requirements for CompilationIn a compilation engagement, the accountant must do the following:Possess knowledge about the accounting principles and practices of the clients industry.Know t

5、he client, the nature of the clients business transactions, accounting records, and employees; and the basis, form, and content of the financial statements.Maker inquiries to determine whether the clients information is satisfactoryRead the compiled financial statements and be alert for any obvious

6、omissions or errors in arithmetic and GAAP.Review of Interim Financial Information for Public Companies The object of an interim review is to provide the accountant with a basis for reporting to management, the board of directors, the shareholders, and others on significant matters found through inq

7、uiry and analytical procedures.Other Audits or Limited Assurance EngagementsDebt Compliance Letters and Similar ReportsAttestation Engagements.Types of attestations EngagementsLevels of AssuranceThe attestation standards define three levels of engagements and related forms of conclusions : 1. Examin

8、ations, reviews, and agree-upon procedures. An Examination results in a conclusion that si in a positive form. 2. In a review, the practitioner provides a conclusion in the form of a negative assurance. 3. In an agree-upon procedures engagement, the procedures to be performed are agreed upon by the

9、practitioner, the responsible party making the assertions, and the specific persons who are the intended users of the practitioner report.Prospective Financial StatementsIt refers to predicted or expected financial stamens in some future period or at some future date. Two general types: forecasts an

10、d projections. 1. Forecasts are prospective financial statements that present an entitys financial position, results of operations, and cash flows, to the best of the responsible application.Prospective Financial Statements 2. Projections are prospective financial statements that present an entitys

11、financial position, results of operations, and cash flows, to the best of the responsible partys knowledge and belief, given one or more hypothetical assumptions.Reporting on Internal Control When the practitioner is engaged to report on internal control under the attestation standards, all areas of

12、 internal control are included unless specifically excluded by agreement.Agree-Upon Procedures Engagements When the auditor and management or a third-party user agrees that the audit will be limited to certain specific audit procedures, it is referred to as an agreed-upon procedures engagement.14.2

13、Quality ControlQuality ControlQuality control is a process employed to ensure a certain level of quality in a product or service.Quality control involves the examination of a product, service, or process for certain minimum levels of quality.Quality control can cover not just products, services, and pr