Guide: Preparation, Compilation, and Review Engagements, 2017. AICPA

  • ID: 4435959
  • Book
  • 288 Pages
  • John Wiley and Sons Ltd
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Issued under the authority of Accounting and Review Services Committee (ARSC) and a go–to guide for accountants performing preparation, compilation and review engagements, this version contains the most up–to–date guidance, including the recently issued Statement on Standards for Accounting and Review Services (SSARS) No. 22, Compilation of Pro Forma Financial Information, and SSARS No. 23, Omnibus Statement on Standards for Accounting and Review Services 2016. This edition also contains some enhancive updates related to materiality in review engagements, professional skepticism, and more illustrative accountant s reports.
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1 Review of Financial Statements  01–239

Introduction 01–02

Applicability  03

Consideration of Materiality in a Review Engagement  04–10

Requirements 11–234

General Principles for Performing and Reporting on Review Engagements  11

Professional Skepticism in a Review Engagement 12–16

Engagement Level Quality Control in a Review Engagement  17–21

Independence  22–24

Preconditions for Accepting a Review Engagement 25–30

Communications With Predecessor Accountants 31–34

Agreement on Engagement Terms   35–38

Understanding of the Industry  39

Knowledge of the Entity  40–68

Designing and Performing Review Procedures 69–72

Analytical Procedures 73–113

Illustrative Analytics 114–119

Inquiries and Other Review Procedures 120–143

Illustrative Inquiries 144–145

Reading the Financial Statements   146–148

Reconciling the Financial Statements to the Underlying Accounting Records  149

Evaluating Evidence Obtained From the Procedures Performed 150–153

Written Representations  154–160

Communicating to Management and Others Regarding Fraud or Noncompliance With Laws and Regulations  161–168

Reporting on the Financial Statements General 169–170

Reporting on Financial Statements Prepared in Accordance With a Special Purpose Framework 171–175

Reporting on Comparative Financial Statements 176–182

Reporting on Known Departures From the Applicable Financial Reporting Framework   183–188

Emphasis–of–Matter and Other–Matter Paragraphs in the Accountant s Review Report   189–193

Alert That Restricts the Use of the Accountant s Review Report  194–197

Reporting on Financial Statements Prepared in Accordance With a Financial Reporting Framework

Generally Accepted in Another Country 198–201

The Accountant s Consideration of an Entity s Ability to Continue as a Going Concern   202–207

Subsequent Events and Subsequently Discovered Facts 208–214

Initial Review Engagements Opening Balances 215–217

Reference to the Work of Other Accountants in an Accountant s Review Report   218–220

Supplementary Information That Accompanies Reviewed Financial Statements   221–223

Required Supplementary Information   224–226

Change in Engagement From Audit to Review 227–231

Review Documentation 232–234

Illustrative Engagement Letters  235

Illustrative Representation Letter  236–238

Illustrative Accountant s Review Reports on Financial Statements 239

2 Compilation of Financial Statements  01–102

Introduction 01–02

Applicability  03

Requirements 04–86

General Principles for Performing and Reporting on Compilations of Financial Statements 04

Engagement Level Quality Control in a Compilation Engagement  05–09

Independence  10–11

Preconditions for Accepting a Compilation Engagement  12–17

Agreement on Engagement Terms   18–21

Knowledge and Understanding of the Entity s Financial Reporting Framework  22–26

Reading the Financial Statements   27

Other Compilation Procedures 28–35

Reporting General 36–37

Reporting Financial Statements Prepared in Accordance With a Special Purpose Framework 38–41

Reporting Financial Statements that Omit Substantially All the Disclosures Required by the Applicable Financial Reporting Framework  42–49

Reporting Comparative Financial Statements 50–62

Reporting When the Accountant Is Not Independent  63–65

Reporting Known Departures From the Applicable Financial Reporting Framework   66–71

Reporting Supplementary Information That Accompanies Financial Statements and the Accountant s Compilation Report Thereon   72–74

Reporting Required Supplementary Information 75–77

Reporting Alert That Restricts the Use of the Accountant s Compilation Report 78–79

Reporting Emphasis–of–Matter or Other–Matter Paragraphs  80

Reporting Financial Statements Prepared in Accordance With a Prescribed Format  81–86

Compilation of Specified Elements, Accounts, or Items of a Financial Statement  87–90

Change in Engagement From Audit or Review to a Compilation Engagement  91–96

Documentation Requirements  97–99

Illustrative Engagement Letters  100

Illustrative Examples of the Accountant s Compilation Report on Financial Statements  101

Exhibit Compilation Reporting Requirements When Independence Is Impaired  102

3 Preparation of Financial Statements  01–50

Introduction 01

Applicability  02–07

Independence 08–09

Requirements 10–49

General Principles for Performing Engagements to Prepare Financial Statements  10

Engagement Level Quality Control in an Engagement to Prepare Financial Statements   11–15

Preconditions for Accepting an Engagement to Prepare Financial Statements  16–18

Agreement on Engagement Terms   19–22

Knowledge and Understanding of the Entity s Financial Reporting Framework  23–27

Preparing the Financial Statements   28–34

Preparation of Financial Statements in Accordance With a Special Purpose Framework   35–36

Preparation of Financial Statements That Contain a Known Departure or Departures From the Applicable Financial Reporting Framework   37–38

Preparation of Financial Statements That Omit Substantially All Disclosures Required by the Applicable Financial Reporting Framework  39–41

Preparation of Financial Statements Included in a Prescribed Form 42–44

Communication With Management   45–46

Documentation Requirements  47–49

Illustrative Engagement Letters  50

4 Compilation of Pro Forma Financial Information  01–24

Introduction 01

Applicability  02–03

Requirements 04–22

General Principles for Compilations of Pro Forma Financial Information  04–06

Acceptance and Continuance of Client Relationships 07–09

Agreement on Engagement Terms   10–13

The Accountant s Knowledge and Understanding of the Entity s Financial Reporting Framework 14

Compilation Procedures  15–16

The Accountant s Compilation Report on Pro Forma Financial Information  17–20

Documentation  21–22

Illustrative Engagement Letter for a Compilation of Pro Forma Financial Information 23

Illustrative Accountant s Compilation Report on Pro Forma Financial Information 24

5 Preparing or Performing a Compilation or Review of Personal Financial Statements  01–26

Introduction 01

Accounting Considerations  02–05

Internal Control With Respect to Personal Financial Statements 06–08

Agreement on Engagement Terms   09–11

Fraud and Illegal Acts in an Engagement to Prepare or in a Compilation or Review of Personal Financial Statements 12–14

Representation Letters 15–17

Compilation and Review Reports on Personal Financial Statements 18–20

Departures From the Applicable Financial Reporting Framework 21–22

Illustrative Engagement Letters  23

Illustrative Representation Letter  24–25

Illustrations of Accountant s Compilation and Review Reports on Personal Financial Statements 26

Appendix

A Overview of Statements on Quality Control Standards Glossary

Index of Pronouncements and Other Technical Guidance

Subject Index

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