M! Accounting and review service engagement

Question 1

When is SSARS used

Answer 1

When providing standards for unaudited financial statements (compilation, preparation, review of FS)

Question 2

Who promulgates SSARS

Answer 2

the accounting and review services committee

Question 3

What are the three levels of service? The level of assurance provided and the independence required?

Answer 3

Preparation
No assurance
No independence required
Compilation
No assurance
No independence required
Must disclose any lack of independence
Review
Limited assurance
Independence required

Question 4

What is the objective of a review

Answer 4

Express limited assurance that there are no material modifications that should be made to the F/S to conform with the applicable financial reporting framework

Question 5

What is required for a type 1 subsequent event

Answer 5

Require an adjusting journal entry

Question 6

What is required for a type 2 subsequent event

Answer 6

Did not exist prior to the year-end date but needs to be disclosed
Needs to be disclosed in the footnotes

Question 7

What action should an accountant take if they become aware of material information that existed as of the date of the audit report?

Answer 7

1. Advise the client to immediately disclose the new information and disclose its impact
   2.Discuss the matter to determine whether revisions are needed with the individuals such as mgmt or those charged with governance

Question 8

If management refuses to update the F/S, the accountant should

Answer 8

-Notify the client that the report must no longer be associated with the F/S
-Notify applicable regulatory agencies that the accountant’s report should no longer be used
-Notify persons known to be relying or likely to rely on the F/S

Question 9

If the entity will not provide additional or revised information, the accountant should

Answer 9

withdraw from the engagement.

Question 10

SSARS requires compiled financial statements to be accompanied by a compilation report