A limited review of financial statements is an audit restricted to an examination either for a limited period or of a limited part of the records. A review does not contemplate obtaining an understanding of the entity's internal control; assessing fraud risk; tests of accounting records by obtaining sufficient appropriate audit evidence through inspection, observation, confirmation, or the examination of source documents (for example, cancelled checks or bank images); and other procedures ordinarily performed in an audit. Accordingly, a review does not provide assurance that we will become aware of all significant matters that would be disclosed in an audit. Therefore, a review provides only limited assurance that there are no material modifications that should be made to the financial statements in order for the statements to be in conformity with generally accepted accounting principles.
The definition of nonattest services is very inclusive. It includes, for example, preparation of the client's depreciation schedule and preparation of journal entries even if management has approved the journal entries. I have confirmed these examples directly with the AICPA ethics division. The definition of nonattest services includes preparation of tax returns.
The District of Columbia Engagement Letter for Review of Financial Statements by Accounting Firm is a legal document that establishes the relationship between an accounting firm and a client in the District of Columbia. This engagement letter outlines the terms, conditions, and scope of services for performing a review of the client's financial statements. During a review engagement, the accounting firm conducts procedures to obtain limited assurance that the financial statements are free from material misstatement. This level of assurance is lower than that provided by an audit but higher than a compilation engagement. The review engagement helps the accounting firm form a conclusion on whether the financial statements meet the applicable financial reporting framework. The content of the District of Columbia Engagement Letter for Review of Financial Statements by Accounting Firm typically includes: 1. Introduction: The letter begins with the accounting firm's name, address, and contact information, followed by the client's name, address, and contact information. 2. Objective: This section describes the purpose of the review engagement, which is to express limited assurance on the financial statements. 3. Scope of Work: The engagement letter defines the scope of the review engagement, including the specific financial statements to be reviewed (e.g., balance sheet, income statement, statement of cash flows), the period covered, and any agreed-upon procedures. 4. Responsibilities: Both the accounting firm and the client have certain responsibilities. The engagement letter outlines the obligations of each party, such as providing accurate and complete financial information, maintaining internal controls, and ensuring compliance with relevant laws and regulations. 5. Communication: The letter specifies how communication will be conducted between the accounting firm and the client, including the frequency of meetings, reporting deadlines, and contact persons. 6. Independence: This section confirms that the accounting firm is independent and unbiased in performing the review engagement. 7. Fees and Billing: The engagement letter addresses the fees for the services provided by the accounting firm. It outlines the billing cycle, fee structure, and any additional expenses that may be incurred during the engagement. 8. Limitations: The engagement letter highlights the inherent limitations of a review engagement and clarifies that it does not provide absolute assurance or detection of all misstatements. It is important to note that while the content described above is generally applicable to engagement letters for review engagements, the specific language and provisions can vary. Different accounting firms may have their own templates or customization based on client needs. Additionally, there may not be distinct types of engagement letters specific to the District of Columbia.The District of Columbia Engagement Letter for Review of Financial Statements by Accounting Firm is a legal document that establishes the relationship between an accounting firm and a client in the District of Columbia. This engagement letter outlines the terms, conditions, and scope of services for performing a review of the client's financial statements. During a review engagement, the accounting firm conducts procedures to obtain limited assurance that the financial statements are free from material misstatement. This level of assurance is lower than that provided by an audit but higher than a compilation engagement. The review engagement helps the accounting firm form a conclusion on whether the financial statements meet the applicable financial reporting framework. The content of the District of Columbia Engagement Letter for Review of Financial Statements by Accounting Firm typically includes: 1. Introduction: The letter begins with the accounting firm's name, address, and contact information, followed by the client's name, address, and contact information. 2. Objective: This section describes the purpose of the review engagement, which is to express limited assurance on the financial statements. 3. Scope of Work: The engagement letter defines the scope of the review engagement, including the specific financial statements to be reviewed (e.g., balance sheet, income statement, statement of cash flows), the period covered, and any agreed-upon procedures. 4. Responsibilities: Both the accounting firm and the client have certain responsibilities. The engagement letter outlines the obligations of each party, such as providing accurate and complete financial information, maintaining internal controls, and ensuring compliance with relevant laws and regulations. 5. Communication: The letter specifies how communication will be conducted between the accounting firm and the client, including the frequency of meetings, reporting deadlines, and contact persons. 6. Independence: This section confirms that the accounting firm is independent and unbiased in performing the review engagement. 7. Fees and Billing: The engagement letter addresses the fees for the services provided by the accounting firm. It outlines the billing cycle, fee structure, and any additional expenses that may be incurred during the engagement. 8. Limitations: The engagement letter highlights the inherent limitations of a review engagement and clarifies that it does not provide absolute assurance or detection of all misstatements. It is important to note that while the content described above is generally applicable to engagement letters for review engagements, the specific language and provisions can vary. Different accounting firms may have their own templates or customization based on client needs. Additionally, there may not be distinct types of engagement letters specific to the District of Columbia.
