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.
A Guam Engagement Letter for Review of Financial Statements is a formal agreement between a client and an accounting firm based in Guam. This letter outlines the terms and conditions under which the accounting firm will perform a review of the client's financial statements. The purpose of the engagement letter is to clearly define the scope of the review engagement, establish the responsibilities of both the client and the accounting firm, and ensure that both parties are on the same page regarding the objectives and limitations of the review. Within Guam, there are various types of Engagement Letters for Review of Financial Statements by Accounting Firm, each catering to specific client requirements. Some common types include: 1. Full Review Engagement: This type of engagement letter is used when the client requires a comprehensive and in-depth assessment of their financial statements. The accounting firm will perform an extensive review of the client's accounting records, internal controls, and financial reporting systems to provide the highest level of assurance. 2. Limited Review Engagement: In this engagement letter, the accounting firm performs a more limited review of the financial statements. The level of assurance provided in this type of review is lower compared to a full review engagement. It may involve reviewing key financial data and conducting necessary analytical procedures to identify any significant discrepancies or irregularities. 3. Special Purpose Review Engagement: This type of engagement letter is used when the client requires the accounting firm to review their financial statements for a particular purpose other than general reporting. Examples of special purposes could be regulatory compliance, obtaining financing, or meeting specific legal or contractual requirements. The scope and procedures of the review are tailored to meet the specific purpose of the engagement. Regardless of the type of engagement letter used, some key components commonly found in Guam Engagement Letters for Review of Financial Statements include: a. Engagement objectives and scope: Clearly defining the purpose and extent of the review engagement. b. Responsibilities of the accounting firm: Outlining the tasks and procedures the accounting firm will perform during the review, including the use of professional judgment and adherence to relevant accounting standards. c. Responsibilities of the client: Stating the client's responsibility to provide accurate and complete financial information, supporting documents, access to necessary personnel, and cooperation throughout the engagement. d. Limitations of the review: Acknowledging that a review engagement does not provide absolute assurance and does not guarantee detection of all errors, frauds, or non-compliance. e. Reporting and communication: Establishing how the accounting firm will communicate the results of the review, including the format and timing of the report. f. Fee arrangements: Specifying the fees and billing terms for the review engagement. When utilizing a Guam Engagement Letter for Review of Financial Statements by an Accounting Firm, it is crucial for both parties to carefully review, understand, and agree upon the terms outlined in the engagement letter before commencing the review process.A Guam Engagement Letter for Review of Financial Statements is a formal agreement between a client and an accounting firm based in Guam. This letter outlines the terms and conditions under which the accounting firm will perform a review of the client's financial statements. The purpose of the engagement letter is to clearly define the scope of the review engagement, establish the responsibilities of both the client and the accounting firm, and ensure that both parties are on the same page regarding the objectives and limitations of the review. Within Guam, there are various types of Engagement Letters for Review of Financial Statements by Accounting Firm, each catering to specific client requirements. Some common types include: 1. Full Review Engagement: This type of engagement letter is used when the client requires a comprehensive and in-depth assessment of their financial statements. The accounting firm will perform an extensive review of the client's accounting records, internal controls, and financial reporting systems to provide the highest level of assurance. 2. Limited Review Engagement: In this engagement letter, the accounting firm performs a more limited review of the financial statements. The level of assurance provided in this type of review is lower compared to a full review engagement. It may involve reviewing key financial data and conducting necessary analytical procedures to identify any significant discrepancies or irregularities. 3. Special Purpose Review Engagement: This type of engagement letter is used when the client requires the accounting firm to review their financial statements for a particular purpose other than general reporting. Examples of special purposes could be regulatory compliance, obtaining financing, or meeting specific legal or contractual requirements. The scope and procedures of the review are tailored to meet the specific purpose of the engagement. Regardless of the type of engagement letter used, some key components commonly found in Guam Engagement Letters for Review of Financial Statements include: a. Engagement objectives and scope: Clearly defining the purpose and extent of the review engagement. b. Responsibilities of the accounting firm: Outlining the tasks and procedures the accounting firm will perform during the review, including the use of professional judgment and adherence to relevant accounting standards. c. Responsibilities of the client: Stating the client's responsibility to provide accurate and complete financial information, supporting documents, access to necessary personnel, and cooperation throughout the engagement. d. Limitations of the review: Acknowledging that a review engagement does not provide absolute assurance and does not guarantee detection of all errors, frauds, or non-compliance. e. Reporting and communication: Establishing how the accounting firm will communicate the results of the review, including the format and timing of the report. f. Fee arrangements: Specifying the fees and billing terms for the review engagement. When utilizing a Guam Engagement Letter for Review of Financial Statements by an Accounting Firm, it is crucial for both parties to carefully review, understand, and agree upon the terms outlined in the engagement letter before commencing the review process.
