Engagement Essentials: Preparation, Compilation, and Review of Financial Statements

Chapter 1 1-1 Introduction to Preparation, Compilation, and Review Engagements 1-1

Reporting on Financial Statements 1-2

Evolution of Engagements to Prepare Financial Statements 1-5

Hierarchy of Standards and Guidance 1-9

Quality Control in Engagements Performed Under SSARSs 1-11

Peer Review 1-16

Summary 1-18

Practice Questions 1-20

Chapter 2 2-1 Pre-engagement Considerations 2-1

Financial Statement Considerations 2-2

Other Accounting Frameworks 2-4

Independence and Ethics 2-8

Acceptance and Continuance of Client Relationships 2-13

Summary 2-17

Practice Questions 2-18

Chapter 3 3-1 Performing an Engagement to Prepare Financial Statements 3-1

Objective and Scope 3-2

Performance Requirements 3-5

Documentation for Engagements to Prepare Financial Statements 3-10

Summary 3-12

Practice Questions 3-13

Chapter 4 4-1 Performing Compilation Engagements 4-1

Compilation Framework and Objectives 4-2

Compilation Performance Standards 4-7

Documentation for Compilation Engagements 4-10

Summary 4-14

Practice Questions 4-15

Chapter 5 5-1 Reporting on Compilation Engagements 5-1

Standard Compilation Reports 5-2

Common Modifications to Standard Compilation Reports 5-4

Reporting on SPF Financial Statements 5-11

Summary 5-13

Chapter 6 6-1 Other Compilation Engagements 6-1

Compiling Accounts, Elements, or Items of Financial Statements 6-2

Compilation Engagements for Pro Forma Financial Information 6-4

Compilation Engagements for Prospective Financial Statements 6-8

Compilation Engagements for Interim Financial Statements 6-10

Summary 6-13

Chapter 7 7-1 Performing Review Engagements 7-1

Review General Principles and Objective 7-2

Copyright 2017 Table of Contents 3

Review Performance Standards 7-7

Documentation for Review Engagements 7-15

Change in Level of Service 7-19

Summary 7-20

Practice Questions and Case Studies 7-21

Chapter 8 8-1 Inquiry and Analytical Review Procedures 8-1

Analytical Procedures 8-2

Inquiry Procedures 8-10

Summary 8-13

Cases 8-14

Chapter 9 9-1 Reporting on Review Engagements 9-1

Standard Review Reports 9-2

Some Major Differences From Compilation Engagements 9-4

Common Modifications to Standard Review Reports 9-5

Restricting the Use of Review Reports 9-15

Special Purpose Framework Financial Statements 9-17

Summary 9-19

Cases 9-20

Appendix A Illustrative Engagements Letters A-1

Appendix B Sample Compilation Reports B-1

Appendix C Sample Review Reports C-1

Glossary Glossary 1

Index Index 1

Solutions Solutions 1

Chapter 1 Solutions 1

Chapter 2 Solutions 4

Chapter 3 Solutions 6

Chapter 4 Solutions 9

Chapter 5 Solutions 15

Chapter 6 Solutions 21

Chapter 7 Solutions 23

Chapter 8 Solutions 28

Chapter 9 Solutions 31