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.
Maryland Engagement Letter for Review of Financial Statements by an Accounting Firm is a legally binding document that outlines the terms and conditions under which an accounting firm will perform a review engagement on the financial statements of a company or organization based in Maryland. This engagement letter serves as an agreement between the accounting firm and the client. The purpose of the engagement letter is to clearly define the scope of work, responsibilities, and expectations of both parties involved in the review engagement. It helps establish a professional relationship and ensures that both the accounting firm and the client are on the same page. The Maryland Engagement Letter for Review of Financial Statements typically includes the following key components: 1. Introduction: This section provides an overview of the engagement, including the names and addresses of the accounting firm and the client. 2. Objective: The objective of the engagement is specified in this section, highlighting that it is to conduct a review of the financial statements prepared by the client. 3. Scope of Work: This section outlines the specific procedures the accounting firm will perform during the review engagement. It may include sample testing, inquiries of management, analytical procedures, and other relevant procedures required for a review engagement. 4. Client Responsibilities: The engagement letter clearly defines the client's responsibilities, such as providing accurate and complete financial records, timely access to necessary information, and cooperation during the review process. 5. Audit Standards: The engagement letter highlights that the review engagement will be conducted in accordance with Generally Accepted Accounting Principles (GAAP) and relevant professional standards issued by the American Institute of Certified Public Accountants (AICPA). 6. Timeline: The engagement letter specifies the expected timeline for completing the review engagement and submitting the final review report. 7. Fee Structure: The engagement letter outlines the fee structure for the review engagement, including the billing rates, payment terms, and any additional expenses that may be incurred. Types of Maryland Engagement Letters for Review of Financial Statements by Accounting Firms: 1. General Engagement Letter for Review of Financial Statements: This is the standard engagement letter used for review engagements by accounting firms in Maryland. It covers the general requirements and procedures for conducting a review engagement. 2. Customized Engagement Letter for Review of Financial Statements: This type of engagement letter is tailored to the specific needs and circumstances of the client. It may include additional provisions or procedures based on the unique characteristics of the client's business or industry. 3. Annual Engagement Letter for Review of Financial Statements: This engagement letter is designed for recurring review engagements conducted annually by accounting firms for their clients. It outlines the terms and expectations for each subsequent review engagement. In conclusion, the Maryland Engagement Letter for Review of Financial Statements is a crucial document that establishes a framework for the review engagement between an accounting firm and its client. It ensures transparency, clarity, and sets the foundation for a successful partnership in maintaining the financial integrity of the client's organization.Maryland Engagement Letter for Review of Financial Statements by an Accounting Firm is a legally binding document that outlines the terms and conditions under which an accounting firm will perform a review engagement on the financial statements of a company or organization based in Maryland. This engagement letter serves as an agreement between the accounting firm and the client. The purpose of the engagement letter is to clearly define the scope of work, responsibilities, and expectations of both parties involved in the review engagement. It helps establish a professional relationship and ensures that both the accounting firm and the client are on the same page. The Maryland Engagement Letter for Review of Financial Statements typically includes the following key components: 1. Introduction: This section provides an overview of the engagement, including the names and addresses of the accounting firm and the client. 2. Objective: The objective of the engagement is specified in this section, highlighting that it is to conduct a review of the financial statements prepared by the client. 3. Scope of Work: This section outlines the specific procedures the accounting firm will perform during the review engagement. It may include sample testing, inquiries of management, analytical procedures, and other relevant procedures required for a review engagement. 4. Client Responsibilities: The engagement letter clearly defines the client's responsibilities, such as providing accurate and complete financial records, timely access to necessary information, and cooperation during the review process. 5. Audit Standards: The engagement letter highlights that the review engagement will be conducted in accordance with Generally Accepted Accounting Principles (GAAP) and relevant professional standards issued by the American Institute of Certified Public Accountants (AICPA). 6. Timeline: The engagement letter specifies the expected timeline for completing the review engagement and submitting the final review report. 7. Fee Structure: The engagement letter outlines the fee structure for the review engagement, including the billing rates, payment terms, and any additional expenses that may be incurred. Types of Maryland Engagement Letters for Review of Financial Statements by Accounting Firms: 1. General Engagement Letter for Review of Financial Statements: This is the standard engagement letter used for review engagements by accounting firms in Maryland. It covers the general requirements and procedures for conducting a review engagement. 2. Customized Engagement Letter for Review of Financial Statements: This type of engagement letter is tailored to the specific needs and circumstances of the client. It may include additional provisions or procedures based on the unique characteristics of the client's business or industry. 3. Annual Engagement Letter for Review of Financial Statements: This engagement letter is designed for recurring review engagements conducted annually by accounting firms for their clients. It outlines the terms and expectations for each subsequent review engagement. In conclusion, the Maryland Engagement Letter for Review of Financial Statements is a crucial document that establishes a framework for the review engagement between an accounting firm and its client. It ensures transparency, clarity, and sets the foundation for a successful partnership in maintaining the financial integrity of the client's organization.
