Nolasco, Marymerjoie M.

IA-331 BS – Internal Auditing

1. What are Review Engagements? Explain the following:

Review Engagement provides a restricted level of assurance which the
company’s financial statement fulfill with the recommended Financial Reporting
Framework that makes more convenient that audit engagement. (CFI, 2015)
 Reviews of Historical Financial Information
Obviously, this is done after the financial statements are completed. It
also directed in providing limited assurance as a review engagement
inclusion. It only needs to demonstrate that no significant changes are
required for the financial statements to be in compliance with the standards.
Furthermore, it is primarily concentrated in areas with a higher level of
misstatement risk. (Account tools, 2019)
 Review of Interim Financial Information
It provides a basis for the accountant to communicate whether he or
she is aware of any material changes that should be made to the interim
financial information in order for it to conform to generally accepted
accounting principles. It does not offer a basis for giving a judgment on
whether the financial statements are presented honestly, in all important
ways, in accordance with generally accepted accounting standards. (PCAOB,
2003)
 Examination of Prospective Financial Information
It intends to provide a perception as to whether or not prospective
financial information was adequately equipped on the basis of stated
assumptions, including a negative assurance statement whether or not those
statements have a reasonable framework for the development of the
prospective financial information. (BDO, 2021)
2. What are Agreed-Upon Procedures? Explain its scope and objectives.
The procedures, known as audit standards, are established and agreed
upon by the body performing the audit and any appropriate third parties (Cole,
2015). In an agreed-upon procedures engagement, the member's goal is to use
their professional talents and expertise in carrying out processes of an assurance
type for which the member, the engaged party, and any third party intended user
are responsible. (APS1)
3. What are a Compilation Engagements? Explain its scope and objectives.
A compilation engagement is one in which a firm hires an outside
accountant to produce and present financial statements for them (CFI, 2015).
The goal is to help management in presenting financial information in the form of
financial statements without undertaking to offer any guarantee that no
Nolasco, Marymerjoie M. IA-331 BS – Internal Auditing

substantial changes should be made to the financial statements in order for them
to adhere to the appropriate financial reporting framework. Due to the its
limitation scope, The CPA's report will not express an opinion or give any
assurance about the financial statements. (ARC, 2018)
4. Differentiate the following:
 Review Engagements from Agreed-Upon Procedures
Review engagements is when the practitioners provide a limited
assurance report following a certain review of historical financial statements
while Agreed-upon procedures, the practitioners provide such reports based
only on the factual findings regarding financial information and has no
assurance engagements involved which can leaked information out in public.
(McGeachy, 2014)
 Review Engagements from Compilation Engagements
Review engagements is when the practitioners provide a limited
assurance report following a certain review of historical financial statements
while compilation engagement, the practitioners provide assistants in the
management by preparing and presenting the historical financial information
and adhere the reports with no assurance provided. (McGeachy, 2014)
 Agreed-upon Procedures from Compilation Engagements
An Agreed-Upon Procedures engagement is frequently conducted
when a firm requires reporting that is outside the scope of a review or
compilation, but does not want to pay the expenditures of an audit while the
compilation engagement, provide no assurance about the company's financial
statements. (McConnell & Jones, 2016)
5. Why is a CPA / Accountant engaged to perform these services?
CPAs / Accountants engage to perform these services because the
company they work for needs to have a consistent condition financially. They
used such to professionally evaluate the operations inside the company
complying with the government requirements in order to have a reference for
investments since creditors are examining such statements if it is credible and
reliable due to the fact that investing money is a very risky action or decision and
investors will do.
Nolasco, Marymerjoie M. IA-331 BS – Internal Auditing

References:
Accounting Tools (2019). Financial Statement Review. Retrieved from
https://www.accountingtools.com/articles/what-is-a-financial-statement-review.html
Historical Financial Information Definition. (n.d.). Law Insider. Retrieved July 30, 2021,
from https://www.lawinsider.com/dictionary/historical-financial-information
AS 4105: Reviews of Interim Financial Information. (n.d.). Default. Retrieved from
https://pcaobus.org/oversight/standards/auditing-standards/details/AS4105
BDO Mozambique (2021). Examination of Prospective Financial Information. Retrieved
from Www.bdo.co.mz. https://www.bdo.co.mz/en-gb/services/audit-
assurance/examination-of-prospective-financial-information
Ben Cole (2015). What is agreed-upon procedures. SearchCompliance. Retrieved July
30, 2021, from https://searchcompliance.techtarget.com/definition/agreed-upon-
procedures-AUP
Audit, Review and Compilation: How CPA Reports Differ | GRF CPAs & Advisors.
(2018). GRF CPAs & Advisors. Retrieved from https://www.grfcpa.com/resource/audit-
review-and-compilation/
Dawn McGeachy (2014) Growing Your Practice: Agreed-Upon Procedures
Engagements. Retrieved from https://www.ifac.org/knowledge-gateway/supporting-
international-standards/discussion/growing-your-practice-agreed-upon-procedures-
engagements

McConnell & Jones (2016).

Compliance and reporting.
Retrieved from
https://mcconnelljones.com
Nolasco, Marymerjoie M. IA-331 BS – Internal Auditing

McConnell & Jones (2016).

Compliance and reporting.
Retrieved from
https://mcconnelljones.com
McConnell & Jones (2016). Compliance and reporting. Retrieved
fromhttps://mcconnelljones.com
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