Requirements for Compilation Posses knowledge about the accounting principles and practice of the clients industry. Know the client: the nature of the clients business transactions, accounting records and employees; and the basis, form, and content of the financialstatements Make inquiries to determine whether the clients information is satisfactory. Read the compiled financial statements and be alert for any obvious omissions or errors in arithmetic and GAAP Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Requirements for Compilation • Posses knowledge about the accounting principles and practice of the client’s industry. • Know the client; the nature of the client’s business transactions, accounting records, and employees; and the basis, form, and content of the financial statements. • Make inquiries to determine whether the client’s information is satisfactory. • Read the compiled financial statements and be alert for any obvious omissions or errors in arithmetic and GAAP
Compilation Form of Report Compilation with full disclosure requires disclosures in accordance with GAAP Compilation that omits substantially all disclosure This type of statement is usually expected to be used primarily for management purposes only Compilation without independence. A CPA firm can issue a compilation report even if it is not independent with respect to the client, as defined by the Code of professional Conduct
Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. • Compilation with full disclosure requires disclosures in accordance with GAAP. • Compilation that omits substantially all disclosures. This type of statement is usually expected to be used primarily for management purposes only. • Compilation without independence. A CPA firm can issue a compilation report even if it is not independent with respect to the client, as defined by the Code of Professional Conduct. Compilation Form of Report