Flashcards in SSARs-review engagements Deck (13)
Know what is meant by the term "limited assurance" associated with a "review" in accordance with the SSARSs.
2. Understand the accountant's responsibilities for performing a review engagement in accordance with the SSARSs.
3. Know the structure and content of the accountant's report for a review engagement in accordance with the SSARSs.
review engagements criteria
must meet the preconditions for accepting the engagement
obtain a written agreement as to the terms
must be independent, a review report expresses "negative assurance".
performing the review
obtain an understanding of the entity's industry, business activities and acc principles used
read the f/s to identify departures from financial reporting framework
agree (reconcile) f/s to accounting records
if info is incomplete or inaccurate then request additional info
primary review procedures are (2)
analytical procedures-used to identify unusual f/s relationships
inquiry of management and other personel about financial reporting issues
obtain a written management representation letter (signed by ceo and cfo)
the two primary procedures provided _______
format of review report
title-independent accountant's review report
body of report-4 paragraph
management responsibility for the f/s
signature block-signature, city/state, date
intro paragraph-4 sentences
1. we have reviewed etc
2. a review includes analytical procedures and inquiry of management
3. a review is less in scope than a audit which is opinion of f/s as a whole
4. we do not express such opinion
management responsibility-one long sentence
management is responsible for the preparation and fair presentation of these f/s in accordance with accounting principles generally accepted in the USA. this includes the design, implementation and maintenance of I/C relevant to the fair presentation of f/s that are free from material misstatement wether due to fraud or error
accountants responsibility-3 sentences
our responsibilty is to conduct the review engagement in accordance with SSARs, promulgated by ARSC of the CPA
those standars require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the f/s for them to be in accordance with acc principles generally accepted in the USA
we believe that the results of our procedures provide a reasonable basis for our conclusion
accountants conclusion-1 sentence
based on our reviews we are not aware of any material modifications that should be made to the accompanying f/s in order for them to be in accordance with acc principles generally accepted in the USA
*this conclusion is called negative assurance - this isn't super strong assurance but it is assurance none the less
if using a special purpose framework we need to add a _______
emphasis of matter paragraph
if the f/s had known departures then the auditor would need to modify the report by adding a _________ after the conclusion paragraph. if this report is not adequate to state departures then the auditor needs to withdraw from the engagement
"known departures paragraph"