Question

1) The financial statements of nonpublic companies may be compiled or reviewed by the CPAs.

b. Describe in details a review of financial statements and explain your opinion on the importance of a review of financial statements..

Answer 1

Answer

The aim of a compilation is to help management in presenting financial information in the form of financial statements. The accountant uses such information which, according to financial statements, to implement the financial statements, without financially reporting the reporting structure without getting any assurance or providing without any assurance to represent management, should be in line with the reporting structure. A compilation is a fairly different review or audit of financial statements.

A compilation does not consider tests performed in a review, analytical procedures or other processes.In addition, a compilation does not consider obtaining an understanding of the internal control of the unit; Assessing fraud risk; Examination of accounting records by obtaining adequate audit evidence through inspection, inspection, confirmation, or examination of source documents (for example, canceled checks or bank images); Or, in general, other procedures conducted in the audit Accordingly, the accountant will not express any opinion about financial statements or give any assurance.A collection is limited to taking the representation of management and limiting them to financial statements.

A review of financial statements, the performance of examinations and analytical procedures have been included so that a reasonable basis can be given to the accountant to express limited assurance that financial statements are generally according to acceptable accounting principles.