It also talks about certain types of requirements.
This should sound familiar from when we talked earlier about auditing.
We have an unconditional requirement and a presumptively mandatory.
Presumptively mandatory, it's presumed to be mandatory.
That's something you should do.
Unconditional requirement means it is unconditional, you have to do this which says the word must
or is required to, so there's no alternative.
Some of these standards pronouncements we'll talk about is it what we call an unconditional
requirement, you have to do it or is it presumptively mandatory, and something you should do.
Then finally engagement level quality control.
The engagement partner is responsible for the overall quality of the engagement, the
direction, the planning, the supervision, the performance, also the report.
If you're giving a report and I say if any, here's why.
As we continue, preparation of financial statements has no report, there's no report.
Basically all you're presenting are the financial statements that are basically gonna be saying
that no assurances provided.
It's clearly stated in the statements, no assurance.
In a compilation you're gonna have a report but it's gonna be one paragraph because they
dummied it down.
It used to be three paragraphs, add another paragraph, four paragraph and it looked like
it was doing more than it was.
You're giving no assurance, let's make it one paragraph.
The review report, four paragraphs and it looks more like an audit report with management's
responsibility, accountant's responsibility, accountant's conclusion which is the limited
assurance and then of course an audit, we've already talked about in the past.
But again, SSARS is covering these things, that's what today's topic is.
Again, understanding that whether or not you're issuing a report in compliance with the quality
control policy and procedures.
Client's management and acceptance, engagement documentation and so on.
It says before accepting or continuing engagement, the accountant should consider the ethical
requirements, are they satisfied.
Reliable information is available because if there's no information you can't do the
work you need, whether it's reading the information or understanding the policies and procedures.
There's no reason to doubt the client's integrity because again whose statements are these?
Managements.
If they lack integrity, we can't put much reliance on those numbers.
The financial reporting framework selected is acceptable meaning is it again a general
purpose framework, is it a special purpose framework, what framework are we using?
Is it OCBOA, is it US GAAP, IFRS?
Compliance with laws and regulations, oops, management and then this is important.
Management is acknowledge responsibility for.
These are the things they are taking responsibility for.
The framework, internal control and we talk about DIM.
Remember we talked about DIM, Design Implementation and Maintenance of Internal Control.
I mentioned that because you will see that in some of the reports.
Preventing and detecting fraud, compliance with laws and regulations, the accuracy and
completeness of the information, providing the account with access to all relevant information.
That's again what the general principles are talking about and again these are the general
principles for engagements that we're gonna perform.
As we jump in to the meat of all these different types of engagements, we're gonna have to
learn about them.
The key to remember is ARC 60, the general principles of financial statements, ethics,
professional judgment, the conduct and quality control.
They relate to all three of these engagements that we're about to jump into whether it's
preparation of financial statement engagement.
Whether it's a compilation engagement or whether it's a review engagement.
So what we're gonna do in a minute is continue on with that but now get into the meat of
what is a preparation engagement versus a compilation versus a review.