Charles, CPA, performs a variety of engagements in accordance with Statements on Standards for Accounting and Review Services during the year. The following items represent a series of unrelated procedures that Charles might consider performing in separate engagements to review the financial statements of a nonissuer (a review) and to compile the financial statements of a nonissuer (a compilation).
For each of the procedures listed below, in columns B and C identify whether the item is "Required" or "Not Required" by clicking in the associated cell and selecting the appropriate response from the list provided.
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Tasks to be Performed |
Review |
Compilation |
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Charles should establish an understanding with the entity regarding the nature and limitations of the services to be performed | ||
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Charles should make inquiries concerning actions taken at the board of directors' meetings | ||
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Charles, as the entity's successor accountant, should communicate with the predecessor accountant to obtain access to the predecessor's working papers | ||
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Charles should obtain a level of knowledge of the accounting principles and practices of the entity's industry | ||
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Charles should obtain an understanding of the entity's internal control | ||
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Charles should perform analytical procedures designed to identify relationships that appear to be unusual | ||
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Charles should make an assessment of control risk | ||
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Charles should send a letter of inquiry to the entity's attorney to corroborate the information furnished by management concerning litigation | ||
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Charles should obtain a management representation letter from the entity | ||
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Charles should study the relationships of the financial statement elements that would be expected to conform to a predictable pattern | ||
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Charles should communicate to the entity's senior management employees' noncompliance with laws and regulations discovered by the accountant that are clearly inconsequential | ||
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Charles should make inquiries about events subsequent to the date of the financial statements that would have a material effect on the financial statements | ||
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Charles should modify the accountant's report if there is a change in accounting principles that is adequately disclosed | ||
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Charles should submit a hard copy of the financial statements and accountant's report when the financial statements and accountant's report are submitted on a computer disk | ||
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Charles should make inquiries to evaluate whether there is substantial doubt about the entity's ability to continue as a going concern |