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.
Wake North Carolina Engagement Letter for Review of Financial Statements and Compilation by Accounting Firm: An engagement letter in Wake, North Carolina is a crucial document that outlines the terms and conditions agreed upon between an accounting firm and its client regarding the review of financial statements and compilation services. This letter serves as a legal binding agreement, ensuring a clear understanding of the expectations and responsibilities of both parties involved. Key elements mentioned in a Wake North Carolina engagement letter include: 1. Scope of Services: The engagement letter defines the specific services to be provided by the accounting firm, such as financial statement review and compilation. It outlines the timeframe of engagement, the intended use of the financial statements, and any limitations or exclusions to the services. 2. Responsibilities of the Accounting Firm: The engagement letter clarifies the responsibilities of the accounting firm during the review of financial statements and compilation process. This includes conducting the engagement in accordance with applicable accounting standards, identifying and assessing risks, and maintaining professional skepticism. 3. Responsibilities of the Client: The engagement letter also outlines the responsibilities of the client, which may include providing accurate and complete financial records, timely responses to inquiries, and access to necessary documentation. The client is also responsible for the accuracy and completeness of the financial statements. 4. Confidentiality and Non-Disclosure: To protect both parties, the engagement letter emphasizes the importance of maintaining confidentiality and non-disclosure of financial information shared during the engagement. It assures that the accounting firm will use the information solely for the specified engagement and will not disclose it to third parties without proper consent. 5. Professional Fees: The engagement letter clearly states the agreed-upon fee structure for the services provided, including any hourly rates, fixed fees, or additional expenses. It also defines the terms of payment, such as due dates and accepted modes of payment. Types of Wake North Carolina Engagement Letters for Review of Financial Statements and Compilation: 1. Engagement Letter for Review of Financial Statements: This type of engagement letter is specifically tailored for the review of financial statements. It delves into the specific procedures, techniques, and analytical tools utilized by the accounting firm to assess the fair presentation of the financial statements. 2. Engagement Letter for Compilation Services: Alternatively, an engagement letter for compilation services focuses on the compilation of financial statements. This letter outlines the process by which the accounting firm collects, classifies, and summarizes the financial information provided by the client. It emphasizes that the compiled financial statements are not audited or reviewed for accuracy and completeness. In summary, a Wake North Carolina engagement letter for review of financial statements and compilation by an accounting firm provides transparency regarding services and expectations. It ensures clear communication between the accounting firm and their client, highlighting the rights and obligations of each party throughout the engagement process.Wake North Carolina Engagement Letter for Review of Financial Statements and Compilation by Accounting Firm: An engagement letter in Wake, North Carolina is a crucial document that outlines the terms and conditions agreed upon between an accounting firm and its client regarding the review of financial statements and compilation services. This letter serves as a legal binding agreement, ensuring a clear understanding of the expectations and responsibilities of both parties involved. Key elements mentioned in a Wake North Carolina engagement letter include: 1. Scope of Services: The engagement letter defines the specific services to be provided by the accounting firm, such as financial statement review and compilation. It outlines the timeframe of engagement, the intended use of the financial statements, and any limitations or exclusions to the services. 2. Responsibilities of the Accounting Firm: The engagement letter clarifies the responsibilities of the accounting firm during the review of financial statements and compilation process. This includes conducting the engagement in accordance with applicable accounting standards, identifying and assessing risks, and maintaining professional skepticism. 3. Responsibilities of the Client: The engagement letter also outlines the responsibilities of the client, which may include providing accurate and complete financial records, timely responses to inquiries, and access to necessary documentation. The client is also responsible for the accuracy and completeness of the financial statements. 4. Confidentiality and Non-Disclosure: To protect both parties, the engagement letter emphasizes the importance of maintaining confidentiality and non-disclosure of financial information shared during the engagement. It assures that the accounting firm will use the information solely for the specified engagement and will not disclose it to third parties without proper consent. 5. Professional Fees: The engagement letter clearly states the agreed-upon fee structure for the services provided, including any hourly rates, fixed fees, or additional expenses. It also defines the terms of payment, such as due dates and accepted modes of payment. Types of Wake North Carolina Engagement Letters for Review of Financial Statements and Compilation: 1. Engagement Letter for Review of Financial Statements: This type of engagement letter is specifically tailored for the review of financial statements. It delves into the specific procedures, techniques, and analytical tools utilized by the accounting firm to assess the fair presentation of the financial statements. 2. Engagement Letter for Compilation Services: Alternatively, an engagement letter for compilation services focuses on the compilation of financial statements. This letter outlines the process by which the accounting firm collects, classifies, and summarizes the financial information provided by the client. It emphasizes that the compiled financial statements are not audited or reviewed for accuracy and completeness. In summary, a Wake North Carolina engagement letter for review of financial statements and compilation by an accounting firm provides transparency regarding services and expectations. It ensures clear communication between the accounting firm and their client, highlighting the rights and obligations of each party throughout the engagement process.
