Assignment 4-3 Compilations and Reviews

Assignment 4-3 Compilations and Reviews - Obtain an...

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Assignment 4-3 Compilations and Reviews Chapter 21 21-8. What type of knowledge must an accountant possess about the entity in order to perform a compilation engagement? The accounting principles and practices of the industry in which the entity operates. A general understanding of the client’s organization; its operating characteristics; and the nature of its assets, revenues, and expenses. An understanding of the accounting principles and practices trusted by the client. A review engagement? Obtaining knowledge of the accounting principles and practices of the industry in which the entity operates. Obtaining a general understanding of the entity’s organization, its operating characteristics, and the nature of its assets, liabilities, revenues, and expenses.
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Unformatted text preview: Obtain an understanding of the accounting principles and practices used by the client in measuring, recognizing, recording, and disclosing all significant accounts and disclosures in the financial statements. Asking the entitys personnel about important matters. Performing analytical procedures to identify relationships and individual items that appear to be unusual. Reading the financial statements to determine if they conform to the applicable financial reporting framework. Obtaining reports from other accountants, if any, who have audited or reviewed the financial statements or significant components. Obtaining a representation letter from management....
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