Preparation Engagement
applicable standards
SSARS
Preparation Engagement
level of assurance
none
Preparation Engagement
entities
nonissuers only
Preparation Engagement
knowledge required
- knowledge of accounting principles & practices of industry
- general understanding of client's business
Preparation Engagement
inquiry & analytical procedures required?
none unless information is questionable
Preparation Engagement
GAAP disclosure omitted
okay if otherwise in conformity with framework
may omit, but need to disclose in FS
* omission cannot be to mislead
Preparation Engagement
GAAP departures
may depart from GAAP
need to disclose in FS
Preparation Engagement
independence
not required
(non-attest engagement)
Preparation Engagement
engagement letter
presumptively mandatory
Preparation Engagement
representation letter
not required
Preparation Engagement
understanding of internal control
not required
Preparation Engagement
errors & irregularities detection
only obvious errors
Preparation Engagement
FS Reported on
(BS/IS/RE/CF)
one or more FS may be prepared
Preparation Engagement
communication with predecessor auditor
not required
Preparation Engagement
subsequent event inquiries
not required
Compilation Engagement
applicable standards
SSARS
Compilation Engagement
level of assurance
none
Compilation Engagement
entities
nonissuers only
Compilation Engagement
knowledge required
- knowledge of accounting principles & practices of industry
- general understanding of client's business
STAFF
Compilation Engagement
inquiry & analytical procedures required?
none unless information is questionable
Compilation Engagement
GAAP disclosure omitted
okay if otherwise in conformity with framework
may omit most without restricting use
- warn with ending paragraph (if included might influence users conclusions)
* omission not intended to mislead
Compilation Engagement
GAAP departures
DISCLOSE: modify report to discuss GAAP departures
or
WITHDRAW
Compilation Engagement
independence
not required
but must disclose lack of independence
Compilation Engagement
engagement letter
presumptively mandatory
Compilation Engagement
representation letter
not required
Compilation Engagement
understanding of internal control
not required
(no test work)
Compilation Engagement
errors or irregularities detection
only obvious errors found when reading financial statements
Compilation Engagement
FS Reported on
(BS/IS/RE/CF)
one or more FS allowed to be reported on
Compilation Engagement
communication with predecessor auditor
not required
Compilation Engagement
subsequent event inquiries
not required
Review Engagement
applicable standards
SSARS (nonissuer)
SAS (nonissuer interim) **
PCAOB (issuer interim) **
** when annual financial statements are audited
Review Engagement
level of assurance
limited (negative) assurance
Review Engagement
knowledge required
- knowledge of accounting principles & practices of industry
- increased knowledge of client's business
Review Engagement
GAAP disclosure omitted
* recommend that FS be revised to conform with framework
if not revised: all disclosures are required OR must modify review report
Review Engagement
inquiry & analytical procedures required?
YES
inquiry- internal personnel
analytical procedures
Review Engagement
GAAP departures
* recommend that FS be revised to conform with framework
DISCLOSE: modify report to discuss GAAP departure
or
WITHDRAW
Review Engagement
independence
required
Review Engagement
engagement letter
presumptively mandatory
Review Engagement
representation latter
required
Review Engagement
understanding of internal control
SSARS (nonissuers annual) - not required
SAS (nonissuer interim)- required
PCAOB (issuer interim)- required
*** interim reviews only
Review Engagement
errors & irregularities detection
only errors discovered through inquiry & analytical procedures
Review Engagement
FS Reported on
(BS/IS/RE/CF)
one or more FS allowed if scope of inquiry & analytical procedures have not been restricted
Review Engagement
communication with predecessor auditor
SSARS (nonissuers annual) - not required
SAS (nonissuer interim)- required
PCAOB (issuer interim)- required
Review Engagement
subsequent event inquiries
required
Audit Engagements
applicable standards
SAS (nonissuers)
PCAOB (issuers)
Audit Engagements
level of assurance
reasonable assurance
Audit Engagements
entities
issuers & nonissuers
Audit Engagements
knowledge required
extensive knowledge of economy, industry, & client's business
Audit Engagements
inquiry & analytical procedures required?
- inquiries of external parties & internal personnel
- analytical procedures (planning required & final review stage required)
- audit procedures
Audit Engagements
GAAP disclosure omitted
all disclosures are required OR
"qualified/adverse" opinion
Audit Engagements
GAAP departures
modify report
"qualified/adverse" opinion
Audit Engagements
independence
required
Audit Engagements
engagement letter
presumptively mandatory
Audit Engagements
representation letter
required
Audit Engagements
understanding of internal control
required
Audit Engagements
errors & irregularities detection
must be designed to provide reasonable assurance of detection of material missttatements
Audit Engagements
FS Reported on
(BS/IS/RE/CF)
one or more FS allowed if scope of audit is not limited & all necessary procedures are applied
Audit Engagements
communication with predecessor auditor
required
Audit Engagements
subsequent event inquiries
required
Examination
applicable standards
SSAE
Examination
level of assurance
reasonable (positive) assurance
Examination
independence required?
required
Examination
restricted use of report?
optional
Examination
representation letter
required
Examination
inquiry about subsequent events
required
Examination
written assertion
generally required
if not obtained- qualified, disclaimer or withdraw
agreed upon procedures
applicable standards
SSAE
agreed upon procedures
independence required?
required
agreed upon procedures
level of assurance
none
agreed upon procedures
written assertion
generally required
if not obtained- modify report based on scope limit
agreed upon procedures
restricted use of report?
required
agreed upon procedures
inquiry about subsequent events
required