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.
West Virginia Engagement Letter for Review of Financial Statements and Compilation by Accounting Firm is a formal agreement between an accounting firm and a client in West Virginia, outlining the terms and conditions of conducting a review of financial statements and/or compilation services. This letter serves as a crucial document that clarifies the scope of work, responsibilities, and expectations of both parties involved. The purpose of the engagement letter is to establish a clear understanding of the specific services that the accounting firm will provide, ensuring compliance with professional standards, legal regulations, and ethical guidelines. It is essential to tailor the engagement letter to the specific needs and circumstances of each client. Here are some common types of West Virginia Engagement Letters for Review of Financial Statements and Compilation by Accounting Firm: 1. Engagement Letter for Compilation Services: This type of engagement letter is specific to compilations, where the accounting firm assists the client in presenting financial information in the form of financial statements without undertaking substantive procedures or expressing an opinion or assurance. 2. Engagement Letter for Review Services: This type of engagement letter is tailored for review engagements, wherein the accounting firm performs analytical procedures and other limited review procedures to provide limited assurance that the financial statements are free from material misstatements. 3. Engagement Letter for Review and Compilation Services Combined: In certain cases, a client may require both review and compilation services. This type of engagement letter will outline the accounting firm's responsibilities for both engagements separately, ensuring transparency and clarity. Key elements included in West Virginia Engagement Letter for Review of Financial Statements and Compilation by Accounting Firm may encompass: a) Objective and Scope: Clearly define the objective of the engagement, whether it's a compilation or review engagement, and specify the period the engagement will cover. Establish the limitations on the engagement and state that the scope does not extend to audits. b) Responsibilities of the Accounting Firm: Highlight the responsibilities of the accounting firm, including its obligation to comply with relevant professional standards, regulations, and ethical guidelines while conducting the review or compilation services. State that the accounting firm will exercise professional judgment during the engagement. c) Responsibilities of the Client: Specify the client's responsibilities, such as providing accurate and complete financial records, granting access to necessary information, and notifying the accounting firm of any changes in the financial statements. d) Deliverables and Reporting: Detail the expected deliverables, which may include compiled financial statements or reviewed financial statements, along with the issuance of a report expressing the accounting firm's findings, conclusions, and any required disclosures. e) Compensation and Billing: Outline the fee structure, payment terms, and any additional costs that the client may be responsible for, such as out-of-pocket expenses incurred during the engagement. f) Termination and Dispute Resolution: Include provisions addressing termination of the engagement, circumstances leading to termination, and methods of resolving disputes that may arise during the engagement. It is important to note that engagement letter templates may vary among accounting firms and depend on the specific requirements and preferences of the parties involved. It is recommended that the client carefully review the engagement letter and seek legal counsel if necessary before signing to ensure all expectations and agreements are properly addressed.West Virginia Engagement Letter for Review of Financial Statements and Compilation by Accounting Firm is a formal agreement between an accounting firm and a client in West Virginia, outlining the terms and conditions of conducting a review of financial statements and/or compilation services. This letter serves as a crucial document that clarifies the scope of work, responsibilities, and expectations of both parties involved. The purpose of the engagement letter is to establish a clear understanding of the specific services that the accounting firm will provide, ensuring compliance with professional standards, legal regulations, and ethical guidelines. It is essential to tailor the engagement letter to the specific needs and circumstances of each client. Here are some common types of West Virginia Engagement Letters for Review of Financial Statements and Compilation by Accounting Firm: 1. Engagement Letter for Compilation Services: This type of engagement letter is specific to compilations, where the accounting firm assists the client in presenting financial information in the form of financial statements without undertaking substantive procedures or expressing an opinion or assurance. 2. Engagement Letter for Review Services: This type of engagement letter is tailored for review engagements, wherein the accounting firm performs analytical procedures and other limited review procedures to provide limited assurance that the financial statements are free from material misstatements. 3. Engagement Letter for Review and Compilation Services Combined: In certain cases, a client may require both review and compilation services. This type of engagement letter will outline the accounting firm's responsibilities for both engagements separately, ensuring transparency and clarity. Key elements included in West Virginia Engagement Letter for Review of Financial Statements and Compilation by Accounting Firm may encompass: a) Objective and Scope: Clearly define the objective of the engagement, whether it's a compilation or review engagement, and specify the period the engagement will cover. Establish the limitations on the engagement and state that the scope does not extend to audits. b) Responsibilities of the Accounting Firm: Highlight the responsibilities of the accounting firm, including its obligation to comply with relevant professional standards, regulations, and ethical guidelines while conducting the review or compilation services. State that the accounting firm will exercise professional judgment during the engagement. c) Responsibilities of the Client: Specify the client's responsibilities, such as providing accurate and complete financial records, granting access to necessary information, and notifying the accounting firm of any changes in the financial statements. d) Deliverables and Reporting: Detail the expected deliverables, which may include compiled financial statements or reviewed financial statements, along with the issuance of a report expressing the accounting firm's findings, conclusions, and any required disclosures. e) Compensation and Billing: Outline the fee structure, payment terms, and any additional costs that the client may be responsible for, such as out-of-pocket expenses incurred during the engagement. f) Termination and Dispute Resolution: Include provisions addressing termination of the engagement, circumstances leading to termination, and methods of resolving disputes that may arise during the engagement. It is important to note that engagement letter templates may vary among accounting firms and depend on the specific requirements and preferences of the parties involved. It is recommended that the client carefully review the engagement letter and seek legal counsel if necessary before signing to ensure all expectations and agreements are properly addressed.
