Compiled financial statements represent the most basic level of service that certified public accountants provide with respect to financial statements. In a compilation, the CPA must comply with certain basic requirements of professional standards, such as having a knowledge of the client's industry and applicable accounting principles, having a clear understanding with the client as to the services to be provided, and reading the financial statements to determine whether there are any obvious departures from generally accepted accounting principles (or, in some cases, another comprehensive basis of accounting used by the entity). It may be necessary for the CPA to perform "other accounting services" (such as creating a general ledger for the client, or assisting the client with adjusting entries for the books of the client (before the financial statements can be prepared). Upon completion, a report on the financial statements is issued that states a compilation was performed in accordance with AICPA professional standards, but no assurance is expressed that the statements are in conformity with generally accepted accounting principles. This is known as the expression of "no assurance." Compiled financial statements are often prepared for privately-held entities that do not need a higher level of assurance expressed by the CPA.
Wisconsin Engagement Letter for Review of Financial Statements and Compilation is a formal agreement between an accounting firm and a client, outlining the terms and conditions for providing services related to the review and compilation of financial statements. This engagement letter serves as a crucial document that clarifies the responsibilities and expectations of both parties involved in the engagement. The Wisconsin Engagement Letter for Review of Financial Statements ensures that the accounting firm conducts an independent review of the client's financial statements in accordance with generally accepted auditing standards. This process involves assessing the accuracy, completeness, and compliance of the financial statements with relevant accounting principles and regulations. The engagement letter for review may include specific types or categories, depending on the scope and nature of the services required by the client. Some common types of Wisconsin Engagement Letters are: 1. Full Review Engagement: This engagement letter is used for a comprehensive review of the client's financial statements, where the accounting firm performs extensive analytical procedures, gathers sufficient evidence, and provides a detailed report on their findings. 2. Limited Review Engagement: This engagement letter is suitable when the client requires a less in-depth review of their financial statements. The accounting firm performs fewer procedures and provides a limited assurance report, highlighting any material modifications or adjustments found during the review process. 3. Compilation Engagement: This engagement letter applies when the client needs their financial statements compiled by the accounting firm without any assurance about their accuracy or compliance with accounting standards. The accountant organizes the client's financial data into a structured format but does not express any form of opinion or assurance on the statements. The Wisconsin Engagement Letter for Review of Financial Statements and Compilation typically includes several essential components, such as: 1. Objective: Clearly defining the purpose and scope of the engagement, specifying whether it is a review or compilation engagement. 2. Responsibilities: Outlining the duties and responsibilities of both the accounting firm and the client, including the provision of accurate and complete financial information, access to necessary records, and cooperation during the engagement. 3. Engagement Procedures: Describing the specific procedures that the accounting firm will perform during the review process, ensuring compliance with applicable auditing and accounting standards. 4. Deliverables: Stating the expected deliverables, such as the review report or the compiled financial statements, including any necessary disclaimers or limitations. 5. Fee Structure: Specifying the fees and payment terms for the engagement, including any additional costs associated with additional services or adjustments required. 6. Termination Clause: Defining the conditions and procedures for terminating the engagement, including any applicable notice periods. It is important to note that the contents of a Wisconsin Engagement Letter for Review of Financial Statements and Compilation may vary depending on the specific requirements of the engagement and the accounting firm's policies. Therefore, it is essential to consult with legal and accounting professionals to customize the letter accordingly.Wisconsin Engagement Letter for Review of Financial Statements and Compilation is a formal agreement between an accounting firm and a client, outlining the terms and conditions for providing services related to the review and compilation of financial statements. This engagement letter serves as a crucial document that clarifies the responsibilities and expectations of both parties involved in the engagement. The Wisconsin Engagement Letter for Review of Financial Statements ensures that the accounting firm conducts an independent review of the client's financial statements in accordance with generally accepted auditing standards. This process involves assessing the accuracy, completeness, and compliance of the financial statements with relevant accounting principles and regulations. The engagement letter for review may include specific types or categories, depending on the scope and nature of the services required by the client. Some common types of Wisconsin Engagement Letters are: 1. Full Review Engagement: This engagement letter is used for a comprehensive review of the client's financial statements, where the accounting firm performs extensive analytical procedures, gathers sufficient evidence, and provides a detailed report on their findings. 2. Limited Review Engagement: This engagement letter is suitable when the client requires a less in-depth review of their financial statements. The accounting firm performs fewer procedures and provides a limited assurance report, highlighting any material modifications or adjustments found during the review process. 3. Compilation Engagement: This engagement letter applies when the client needs their financial statements compiled by the accounting firm without any assurance about their accuracy or compliance with accounting standards. The accountant organizes the client's financial data into a structured format but does not express any form of opinion or assurance on the statements. The Wisconsin Engagement Letter for Review of Financial Statements and Compilation typically includes several essential components, such as: 1. Objective: Clearly defining the purpose and scope of the engagement, specifying whether it is a review or compilation engagement. 2. Responsibilities: Outlining the duties and responsibilities of both the accounting firm and the client, including the provision of accurate and complete financial information, access to necessary records, and cooperation during the engagement. 3. Engagement Procedures: Describing the specific procedures that the accounting firm will perform during the review process, ensuring compliance with applicable auditing and accounting standards. 4. Deliverables: Stating the expected deliverables, such as the review report or the compiled financial statements, including any necessary disclaimers or limitations. 5. Fee Structure: Specifying the fees and payment terms for the engagement, including any additional costs associated with additional services or adjustments required. 6. Termination Clause: Defining the conditions and procedures for terminating the engagement, including any applicable notice periods. It is important to note that the contents of a Wisconsin Engagement Letter for Review of Financial Statements and Compilation may vary depending on the specific requirements of the engagement and the accounting firm's policies. Therefore, it is essential to consult with legal and accounting professionals to customize the letter accordingly.
