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Compliation

3 services/associations

Assembling, no assurance, no need for evidence, but must disclose significant assumptions
Standards
Contents
No opinion or assurance
Prospective results may not be achieved
No responsibility to update
Express an opinion on conformity with AICPA and assumption are reasonable

Examination
Independence and evidence required
Projection must be "restricted use"
No AICPA presentation guide - "Except for" qualified or adverse
Modifications to the opinion
No Assumption disclosure - adverse
Assumption not reasonable - adverse
Scope limitation - disclarimer
Partial presentation is not appropriate for general use
PFS must include a summary of significant assumptions

Agree-upon procedures
Conformity with AICPA guideline

Human Resources

Prospective F/S

Standard (HELPME)

Engagement Client Policy

Financial Forecast

General & Limited use

Leadership Responsibilities
Performance of engagement
Peer Review every 3 years between CPA firms for QC

Limited Use

Financial Projection (what if)

Monitoring

Second Partner "Pre-issue" Review


A summary of significant assumptions

No aggressive/Confidential Tax Consulting

Agree-upon procedure

Corporate Tax is ok (noted in writing to Audit Committee)

Required Elements

Independence

SOX requirement

Prohibits other services for auditor of issuers

Restriction of use

Ethical Requirement

Prohibits personal tax service for corporate officers/family

Measurablity

5-year rotation for lead/review partners


Partner to Officer (One-year cool off)

Maintain public confidence

Positive opinion, High-level assurance

Conclusion

Quality Control

Qualified, Disclaimer, or Withdrawal

Examination
Moderate/Negative assurance

All staffs subject to Independence Requirement confirmed in writing

Withdrawal

Review
No assurance

Agreed-upon procedure

Attest Engagement (SSAE)


Focus on overall professional activities
vs.
Individual audit engagement by GAAS
Not someone from engagement team

Audit/Exam something other than historical F/S


Training & Proficiency

Five general standard

Independence
Professional and due professional care

Engagement Quality Reviewer

Professional and adequate knowledge

Internal/External is ok

Review of Interim F/S must be performed

Letter from underwriter

Your belief that the subject can be measured

Before the audit report is released


Modify audit release date if qualify control is later than release date

Planning and supervision

Two field standard

CPA'S independence

Positive Assurance on

Appropriate, sufficient evidence

Required for Examination & Review

Written Assertion

"Due diligence" defense for underwriter with a statement of restricted use

Compliance as to form with SEC audit if F/S is audited


Unaudited F/S

Negative Assurance on

Subsequent Changes after F/S date

Withdrawal

Incomplete presentation of Single FS, added a explanatory paragraph


Client responsible for lacking

Non F/S information conform with Regulation S-K

Relevant Explanatory Paragraph on Complete F/S added to Single FS


Modified opinion on Complete Set cause Disclaimer or Adverse on individual report

Client not responsible for lacking

No comment/assurance on Market Risk sensitive instruments or qualitative disclosure

Report may be issued with restriction

Materiality to determined at single FS/Specific level

Single FS/Specific Element

Part of complete F/S (Opinions for both) or Separate Engagement


Procedure on any inter-related items
Indicate the date of complete F/S on individual report

Understanding with client

Unless not issued with and not significant part of Complete F/S

Piece Meal Opinion is not allowed

Management: F/S & I/C

Other-matter paragraph in auditor's report (restricted use)


Report on separate report

Scope

Review report (SAS or PCAOB)

Procedure (U LIAR CPA)

If noncompliance found

Limitation : No opinion

Compliance

Must have audited F/S

Learn industry accounting & business (Misstatement? Inquiry and Analytic plan)
Inquire Internally (Optional with corporate lawyer)

Negative assurance if no noncompliance found

Analytical : Ratio & Historical


Review: read other stuff

Tell users it is not GAAP

Interim F/S review for Issuer/Public company (SAS/PCAOB)

Contractual

Restricted Use in other matter paragraph

Client representation (F/S. If not complete, add I/C)


Professional Judgement (Misstatement or Scope Limitation?)

Regulatory

Restricted Use in other matter paragraph

Accountant (CPA) Communication (Fraud, Illegal Acts, or I/C issues)

Special Framwork

OCBOA

Special Consideration

AUD2 Non-audit service

No description of purpose why OCBOA used

Cash
No description of purpose why OCBOA used

Tax
Dual Opinion (GAAP & OCBOA)
No emphasis-of-matter about using special purpose framework

Reason not justified

Regulatory (General Use)

Withdraw if

Modifications (Departure from framework)?

Change between Compilation/Review request

Scope Limitation

Compilation (Prior) to Review (Current) - Upgrade

Reporting on Comparative F/S


Disclosure or Withdraw

Departure from reporting framework

No ("We are not aware of any material modification")


Yes ("Add Basis for modification paragraph" before conclusion
Optional to note "Going concern/lack consistency"

Upgrade Prior report to include in Current)

Add a paragraph to explain in current report

Review (Prior) to Compliation (Current) - Download

or Re-issue the prior report (combined with current or issued separately)

Consistent with audited F/S


Summary Adequate?

Management, Board, then Withdraw (seek legal help)

Issue Communcations

Step

F/S available for summary users if F/S not attached

Not intend for misleading

Summary

Disclosure the omission

IF omission of substantial disclosure is found

Different accountants involved

Must have audited F/S


Unmodified or Adverse, no qualifed

Read new F/S

Old accountant decides to issue (optional)


Communicate on Fraud/Illegal Act

Get a representation letter from new accountant

Documentation

Any significant finding

Old accountant not reissue

Withdraw if Adverse/Disclaimer opinion of F/S

Perform that level of service themselves

The engagement Letter

Reissue prior report or

Date later than audited F/S

Service Upgrade

Compilation (No assurnace)

No assurance/No independence requirement (Must be documented)


Industry accounting/practice knowledge

Reference to old accoutant's report

Report when one period is audited


Service Downgrade

Additional paragraph: Previous is less in scope and no opinion


Additional paragraph: Current not audited

Requirement

Understand Client Business

Compilation and Review (SSARS)

Read F/S. Never associated with false, fraudulent, or misleading F/S

Use report appropriate for highest level of service


Otherwise report to Management

Fraud & Illegal acts

No need for inconsequential items

If find inaccurate info

Evidence
No required to review

Withdraw if rejected
Go to client for revision

No need for accuracy/completeness

Review (Limited Assurance)

Sufficient for "No material modification necessary for conforming financial Framework

SSARS not required from personal F/S if no credit

Understanding engagement

Requirement

Not used by 3rd party and restricted use

Learn client (ex-accountant communication is optional)

Engagement letter to replace report ok if

Inquires (inside of the company)


Analytical procedure
Review (F/S Confirmity and other audit/review report)

Private company/non-issuers
Adjusting entries

SSARS

Client representation letter required - date on completion of review

Not applicable

Professional Judgement (Incomplete then not issued)

Tax

Accountant (CPA) Communications

Consulting

S: Management responsibility (fair presentation and I/C)

TAIS

Bookkeeping rendering

S: Accountant responsibility (SSARS and Limited assurance)

Data Processing

Modification appropriate?

Interim F/S review (SAS)

A separate paragraph for disclosure

Departure from framework


Withdraw (No adverse or except for opinion)

Modification in appropriate
Request client to revise and disclose

Subsequent discovery after report date

If effects cannot be determined, notification the report not to be relied on


Dis-associate

If rejection
Notify regulatory agency
Notify users

Supplementary information

An explanation in review report or a separate report