review

Sample compilation and review reports under SSARS 19 for NPOs

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(cross-post from my other blog, Nonprofit Update.)

Update – SSARS 19 had been replaced by SSARS 21. All the reports have been revised. See:

Here is a list of the sample reports under SSARS available on my blogs.

Filling up a bucket – word picture for levels of assurance in audit, review, and compilation

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In a webcast on August 31, 2011, Mr. Michael Glynn, CPA, of the AICPA staff, gave a wonderful word picture of the levels of assurance in a review and audit.  Here’s his idea:  Filling up a bucket with procedures produces different levels of assurance.  I would like to expand Mr. Glynn’s description and provide an illustration.

  • In an audit, the accountant provides obtain reasonable assurance that there are no material errors in the financial statements.
  • In a review, the accountant provides obtain limited assurance that there are no material errors in the financial statements.
  • In a compilation,the accountant does not provide obtain any assurance that there are no material errors in the financial statements.

Notice the similarity and difference?  The overlap between these definitions is how much assurance the accountant provides obtains that there are no material errors in the financial statements.

The differences? …

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Children in school as illustration for management’s responsibility over financial statements – a word picture for SSARS 19

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How can management be response for financial statements and internal control for preparation of the financials when the accountant prepares them?  That is what the second paragraph in the compilation and review report say.  See thumbnail picture of the reports here.  See sample reports here and here.

In a webcast on August 31, 2011, Mr. Michael Glynn, CPA, from the AICPA, gave a fantastic word picture for how management can be responsible for the report and internal control.

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One sentence explanation of the difference between audits and reviews

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(cross posted from www.ulvog.wordpress.com)

I have discussed the differences between audits, reviews, and compilations here and here. Even developed a visual illustration here.  Ask any CPA and you can get a long explanation of the distinctions.

For something shorter, consult this article by Angus Loten in the Wall Street Journal, which said:

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