Evaluating a used car as an illustration of the differences between compilation, review, and audit

You could figure out how good a car is by looking at it from across the street. 

Or you could look inside & drive it around the block. 

Or you could take the car to your mechanic for a couple of hours to get it really checked out .

We can use that as an analogy of the differences between a compilation, a review, and an audit.

Sample compilation and review reports under SSARS 19 for NPOs

Here is a list of the sample reports under SSARS available on my blogs. The samples are available on this blog as well as my other blog, Attestation Update. (These links go to the other blog.)

• SSARS 19 Review reports for NPOs
• SSARS 19 Compilation reports for NPOs
• SSARS 19 – Sample compilation report for omitting substantially all disclosures
• SSARS 19 – Sample compilation report for omitting the statement of cash flow

Filling up a bucket – word picture for levels of assurance in audit, review, and compilation

     

(cross-post from my other blog, Attestation Update.)

In a webcast on August 31, 2011, Mr. Michael Glynn, CPA, of the AICPA staff, gave a wonderful word picture of the levels of assurance in a review and audit.  Here’s his idea:  Filling up a bucket with procedures produces different levels of assurance.  I would like to expand Mr. Glynn’s description and provide an illustration.

• In an audit, the accountant provides reasonable assurance that there are no material errors in the financial statements.
• In a review, the accountant provides limited assurance that there are no material errors in the financial statements.
• In a compilation,the accountant does not provide any assurance that there are no material errors in the financial statements.

Notice the similarity and difference?  The overlap between these definitions is how much assurance the accountant provides that there are no material errors in the financial statements.

The differences?

Two more CPE classes on SSARS are available

Earlier this year I wrote a CPE course on SSARS requirements for CCH . Back in April I mentioned Compilation and Review: Practice Issues (Third Edition) was available. Discussed that course here.  Two more SSARS classes I wrote are now online.  Another will be available soon.  Each of the following classes are two CPE hours.

Compilation and Review: Introduction.  Course description from CCH:

Compilation and Review: Practice Issues (Third Edition) CPE course now available online

I have written a 3-hour online CPE course called Compilation and Review: Practice Issues (Third Edition). It is now available at the CCH Learning Center website.

Here’s what the course covers, from the CCH site:

4 posts on how to deal with possible fraud and illegal acts under SSARS 19

I have four posts up at Attestation Update discussing how SSARS 19 says the accountant should deal with possible fraud and illegal acts encountered while performing compilations and reviews.

Click on any of the following links that look like a good place to start:

Going concern issues under SSARS 19

I have two posts at Attestation Update explaining how to address going concern issues under SSARS 19.  The guidance found in SSARS 19 is rather brief.  Here are the posts:

• Going concern issues in SSARS 19 – part one
• Going concern issues in SSARS 19 – part two

I won’t cross-post those comments to this blog.  Please click the links above to read the discussion.

Posts on documentation requirements from SSARS #19 combined into a page

I have written a series of eight posts on the documentation rules for reviews and comps from SSARS 19 on my other blog, www.attestationupdate.com.  Those posts have been combined into a single ’page’.  This means you can read all the posts in chronological order, which also means they are in logical order.  Click here for the page.

CPE class on SSARS, written by Jim Ulvog – arriving soon!

I have written an on-line CPE course on SSARS called Compilation and Review: Practice Issues.  It is a 3 hour course covering a variety of practice issues for CPAs providing comps and reviews.  It is written at the overview level. 

Arriving soon at the CCH Learning Center.  When it is available on-line, I’ll give more detail and a link to the course.

I wrote the course in a little more casual voice that you might expect to see in a technical class, but not quite as casual as you see on this blog.  If you enjoy the style of writing you see here, you might enjoy the online CPE.

More detail to follow!

Update:  3-hour online CPE course called Compilation and Review: Practice Issues (Third Edition) is now available at the CCH Learning Center website.  Course discussed in more detail at this post.

Documentation requirements under SSARS 19

I have started a series of posts on my other blog discussing the documentation requirements under SSARS 19 for compilations and reviews.  I won’t be cross-posting those discussions on this blog.  The first item is here.

Update – Discussions of reviews start here.

Engagement quality control reviews for attestation engagements

Welcome to the CPAs arriving here from an internet search.  This post is just for the CPAs in my audience. 

Is an engagement letter required for a compilation or review?

I have a post up on my other blog addressing this question. You can find it here, since I won’t be cross posting the entry.

Lack of independence in a compilation

At my other blog, I have a post discussing the option to explain the reasons for an accountant’s lack of independence in a compilation.  Also have a poll to survey readers whether they plan to use this option.  I don’t plan to cross-post those two discussions, so please click on the link to see the post.

What questions do you have on reviews and compilations?

Greetings to the all the accountants arriving here after doing a search on reviews and compilations!  Hope the posts here are of help to you.

What other questions do you have on SSARS 19? Let me know in the comments and I’ll try to help!

Happy New Year and best wishes as you implement the new stuff in SSARS 19!

SSARS 19 – Sample compilation report for omitting substantially all disclosures

(duplicate of post from Attestation Update  blog)

Omission of substantially all disclosures under SSARS No. 19 – Compilation reports will change for organizations with fiscal years ending after December 15, 2010. I have prepared a modified report for departure from GAAP.  Here is the report I will be using after the first of the year for my non-profit clients if any choose to omit all disclosures.  Please feel free to copy, but make sure you modify this based on your firm’s policies.