AUD-Lesson 7 REVIEWS_GRADUAL

Question 1

In addition to the engagement letter, what other document is required for Reviews?

Answer 1

A management representation letter is required

Question 2

For Reviews, what is included in the engagement letter?

Answer 2

Objective of engagement
Management Responsibility: Preparation & presentation of F/S
Accountants Responsibility: Comply with SSARS
Limitations of the engagement
Applicable framework
Expected form & content of review report

Question 3

Is independence required for Reviews?

Answer 3

Yes. There must be independence.

Question 4

Is a report required for Reviews? What are the sections?

Answer 4

Yes. The report should include; Intro, Management responsibility, Accountant’s responsibility, and Accountant’s conclusion

Question 5

What standards govern Review engagements?

Answer 5

SSARS (Statements on Standards for Accounting and Review Services)

Question 6

What procedures are required for Review engagements?

Answer 6

Analytical procedures are required for reviews. Compare results to documented predictions.

Question 7

What is a Review engagement?

Answer 7

Financial statements are presented with no opinion expressed- and limited assurances are given that no material modifications should be made to the financial statements. Independence is required for a review engagement.

Question 8

What are the AR-C Sections for Reviews

Answer 8

Review: AR-C 90

Question 9

What is the Review Evidence that is obtained in a Review engagement?

Answer 9

Engagement Letter (Written understanding of limitations of the engagement)

Knowledge of industry, business, and accounting principals

Inquiries of management

Analytical procedures

Written representations from management

Question 10

What procedures are done to evaluate internal controls in a Review Engagement?

Answer 10

A review engagement does not obtain an understanding of internal control, which is why a review engagement does not express an opinion on the financial statements.

Question 11

What is the objective of a SSARS Review engagement?

Answer 11

Obtain limited assurance that there are no material modifications that should be made to the F/S in order for the statements to be in conformity with GAAP.

Question 12

What kind of an engagement is a Review?

Answer 12

Attest engagement; limited assurance