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.
Minnesota Engagement Letter for Review of Financial Statements by Accounting Firm An engagement letter is a crucial document that defines the nature and scope of services provided by an accounting firm in conducting a review of financial statements for a company based in the state of Minnesota. This letter outlines the terms and conditions under which the review engagement will be performed and serves as a legal agreement between the accounting firm and the client. The Minnesota Engagement Letter for Review of Financial Statements by Accounting Firm involves a comprehensive review of a company's financial records to assess their accuracy, reliability, and adherence to accounting principles. This process helps to provide reasonable assurance to stakeholders, such as shareholders, lenders, and investors, regarding the integrity of the financial statements presented by the company. The main purpose of the engagement letter is to establish mutual understanding and expectations between the accounting firm and the client. It usually includes the following essential elements: 1. Identification of the parties involved: The engagement letter clearly identifies the accounting firm and the company engaging its services. It may also mention any third parties involved in the engagement, such as legal advisors or other experts. 2. Scope of the engagement: The letter defines the scope of the review engagement, specifying the financial statements to be reviewed and the level of assurance to be provided. It also outlines the procedures to be performed and any limitations imposed on the review. 3. Responsibilities of the accounting firm: The engagement letter outlines the responsibilities of the accounting firm, including compliance with professional standards, performing the review with due care and professional skepticism, and maintaining confidentiality of client information. 4. Responsibilities of the client: The letter specifies the client's responsibilities, such as providing complete and accurate financial records, granting access to relevant documents and personnel, and disclosing any known fraud or illegal acts. 5. Timeframe and fees: The engagement letter includes details regarding the timeline for completing the review and the fee structure agreed upon between the accounting firm and the client. It may also mention the billing terms and payment arrangements. Types of Minnesota Engagement Letter for Review of Financial Statements: 1. Standard Minnesota Engagement Letter for Review: This is the most common type of engagement letter used by accounting firms in Minnesota for the review of financial statements. It includes the general terms and conditions required for a review engagement. 2. Customized Minnesota Engagement Letter: In some cases, when the review engagement involves specific industry requirements or complex circumstances, accounting firms may tailor the engagement letter to address those unique factors. These customized letters provide more detailed instructions and procedures relevant to the particular engagement. 3. Minnesota Engagement Letter for Limited Review: This type of engagement letter is used when the client requires a limited review of specific financial information rather than a comprehensive examination of all financial statements. The letter clearly defines the scope and limitations of the review engagement. In conclusion, the Minnesota Engagement Letter for Review of Financial Statements by an Accounting Firm is a critical document that establishes the terms and conditions for conducting a review of financial records. It ensures a common understanding between the accounting firm and the client, clarifying the expectations, responsibilities, and scope of the engagement. Different types of engagement letters may exist based on the specific requirements of the review engagement.
