3air_im15 - 108 CHAPTER 15 Other Public Accounting Services...

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CHAPTER 15 Other Public Accounting Services and Reports LEARNING OBJECTIVES Review Checkpoints Exercises Problems Cases 1. Write appropriate reports for review and compilation of unaudited financial statements. 1, 2, 3, 4 37, 38 41, 42 2. List some interim information review procedures and write a report on a review of interim financial information. 5, 6, 7 38, 43 43 3. Define, explain, and give examples of other comprehensive bases of accounting. 8, 9, 10 44 4. Explain the content of an auditor's report on supplementary current value financial statements in comparison to a standard report on historical cost financial statements. 11, 12 36, 40 5. Describe the various reports on internal control and their connection with public reporting and reporting to a client's audit committee. 13, 14, 15 6. Define the various financial presentations and levels of service involved in association with financial forecasts and projections, and write compilation and examination reports. 16, 17, 18 35, 39 7. Explain auditors' responsibilities for financial statements that will be used in other countries. 19, 20 POWERPOINT SLIDES PowerPoint slides are included on the website. Please take special note of: * Review Engagement Report * Notice to Reader SOLUTIONS FOR REVIEW CHECKPOINTS 15.1 The influence and pressures that led to creation of the Compilations and Review Engagement Standards include: (1) general social dissatisfaction with 108
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"big business," (2) small PA firms want to give service and less-than-audit assurance for unaudited statements, (3) small PA firms want to get away from the complicated standards involved in unaudited engagements, (4) small CPA firms want to avoid the negativism of the unaudited statement disclaimer, (5) small businesses do not appreciate the legal liability worries of PAs and want something more positive than the unaudited statement disclaimer, and (6) Congressional critics (Moss, Metcalf) accused the AICPA of hampering the business services of small PA firms. 15.2 Compilation and Review Engagements are applicable in unaudited financial statement engagements. 15.3 Through the title of the statements or in the footnotes of the statements. 15.4 Both review service and compilation service engagements are less than an audit. A comparison of the three amounts to a hierarchy of assurance: 1. Audit engagement Auditor obtains sufficient competent evidence that serves as a basis for an opinion on financial statements. The auditor obtains reasonable assurance within the inherent limitations of the audit process. 2. Review engagement Accountant obtains limited assurance through analytical procedures that there are no material modifications that should be made to financial statements.
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3air_im15 - 108 CHAPTER 15 Other Public Accounting Services...

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