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.
When hiring an accounting firm in Illinois to review your financial statements, it is crucial to have a clear understanding of the scope of their engagement. This is where the Illinois Engagement Letter for Review of Financial Statements comes into play. This document outlines the terms and conditions of the engagement, ensuring both parties are on the same page regarding the objectives, responsibilities, and limitations of the review. An Illinois Engagement Letter for Review of Financial Statements typically includes the following key elements: 1. Parties Involved: The engagement letter clearly identifies the accounting firm and the client, establishing their professional relationship. 2. Objectives: It describes the purpose of the engagement, which is to perform a review of the client's financial statements in accordance with Generally Accepted Accounting Principles (GAAP). The letter may also specify any additional objectives or agreed-upon procedures. 3. Scope of Work: The letter outlines the specific procedures that the accounting firm will undertake during the review process. This may include analyzing financial statements, conducting inquiries, reviewing supporting documents, and assessing the overall presentation of the financial information. 4. Responsibilities: Both parties' responsibilities are clearly defined to avoid any confusion or misunderstandings. The accounting firm typically takes responsibility for performing the review in accordance with professional standards, while the client is responsible for providing accurate and complete financial records. 5. Limitations: The engagement letter highlights any limitations or restrictions in the review process. For example, it may state that the review is not designed to detect fraud or ensure compliance with laws and regulations. 6. Reporting: The letter specifies the format and timing of the final report that the accounting firm will provide to the client. This report typically includes the firm's findings, conclusions, and recommendations based on the review of the financial statements. Different types of Illinois Engagement Letters for Review of Financial Statements by Accounting Firms may vary based on the specific requirements of the client. For instance, there could be engagement letters specifically tailored for non-profit organizations, small businesses, or publicly-traded companies. Overall, the Illinois Engagement Letter for Review of Financial Statements is a crucial document that sets the foundation for a successful financial review process. It ensures transparency, establishes expectations, and protects the interests of both the client and the accounting firm.When hiring an accounting firm in Illinois to review your financial statements, it is crucial to have a clear understanding of the scope of their engagement. This is where the Illinois Engagement Letter for Review of Financial Statements comes into play. This document outlines the terms and conditions of the engagement, ensuring both parties are on the same page regarding the objectives, responsibilities, and limitations of the review. An Illinois Engagement Letter for Review of Financial Statements typically includes the following key elements: 1. Parties Involved: The engagement letter clearly identifies the accounting firm and the client, establishing their professional relationship. 2. Objectives: It describes the purpose of the engagement, which is to perform a review of the client's financial statements in accordance with Generally Accepted Accounting Principles (GAAP). The letter may also specify any additional objectives or agreed-upon procedures. 3. Scope of Work: The letter outlines the specific procedures that the accounting firm will undertake during the review process. This may include analyzing financial statements, conducting inquiries, reviewing supporting documents, and assessing the overall presentation of the financial information. 4. Responsibilities: Both parties' responsibilities are clearly defined to avoid any confusion or misunderstandings. The accounting firm typically takes responsibility for performing the review in accordance with professional standards, while the client is responsible for providing accurate and complete financial records. 5. Limitations: The engagement letter highlights any limitations or restrictions in the review process. For example, it may state that the review is not designed to detect fraud or ensure compliance with laws and regulations. 6. Reporting: The letter specifies the format and timing of the final report that the accounting firm will provide to the client. This report typically includes the firm's findings, conclusions, and recommendations based on the review of the financial statements. Different types of Illinois Engagement Letters for Review of Financial Statements by Accounting Firms may vary based on the specific requirements of the client. For instance, there could be engagement letters specifically tailored for non-profit organizations, small businesses, or publicly-traded companies. Overall, the Illinois Engagement Letter for Review of Financial Statements is a crucial document that sets the foundation for a successful financial review process. It ensures transparency, establishes expectations, and protects the interests of both the client and the accounting firm.
