Summary of Engagements

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