A review service is not a basis for expressing an

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A review service is not a basis for expressing an opinion on financial statements. Each page of the financial statements should be conspicuously marked as unaudited. The stan- dards indicate that a report on a review services engagement should include the following statements: A review service was performed and the scope of the review engagement was in accordance with generally accepted standards for review engagement. Review procedures consist primarily of enquiries of company personnel and analyti- cal procedures applied to financial data. A review service does not constitute an audit, and an opinion on financial statements is not expressed (a disclaimer of any audit opinion). The accountant is not aware of any material modifications that should be made; or, if aware, a disclosure is made of departure(s) from generally accepted accounting principles. (This is a negative assurance.) When other independent accountants are involved in audit or review of parts of the business, the principal reviewer cannot divide responsibility by referring to the other accountants in the review report, unless the disclosure helps explain the reason for a reservation. In review engagements, PAs follow the spirit of the auditing standards to write 1 CICA Handbook , paragraph 5025.12 or ISRE 2400.9.
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630 PART IV Other Professional Services the form and content of the reference to the work and reports of other PAs. 2 An example of a review report is given in Exhibit 16–1. Compilation Services Compilation is a synonym for an older term—write-up work. Both terms refer to an accoun- tant’s helping a client to “write up” the financial information in the form of financial statements. In a compilation service, an accountant performs few, if any, procedures, and substantially less than in a review service. The description of a compilation of fi nancial statements, according to CICA Handbook paragraph 9200.03, follows, and a similar description is given in ISRS 4410.3: [A compilation service is] one in which a public accountant receives information from a cli- ent and arranges it into the form of financial statements. The public accountant is concerned that the assembly of information is arithmetically correct; however, the public accountant does not attempt to verify the accuracy or completeness of the information provided. Unlike an audit or review engagement in which the public accountant does sufficient work to issue a communication that provides assurance regarding the financial statements, no expression of assurance is contemplated in a compilation engagement. Since compilation engagements provide no assurance credibility, the PA is limited in the action she or he can take. They do, however, have a responsibility not to be associated with misleading information: When the public accountant is aware that there are matters which the public accountant believes would cause the financial statements to be false or misleading, she or he should request additional or revised information in order to complete the statements. If the client
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  • Fall '12
  • Smith
  • Accounting, Accountant, Auditor's report, CICA Handbook

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