10 Questions
In a review engagement, what is the level of assurance provided regarding the financial information?
Moderate level of assurance
What type of procedures are NOT typically performed in a review engagement?
Tests of records and internal control systems
What is the primary objective of a review engagement for a Chartered Accountant?
To state whether the financial statements are prepared in accordance with an identified financial reporting framework
What should the accountant comply with in a review engagement according to the IFAC?
Code of Ethics for Professional Accountants
What type of report is typically expressed in a review engagement?
Unqualified review report
What is the primary purpose of a review engagement?
To provide a moderate level of assurance on the financial information
Which of the following is an example of an agreed upon procedure?
Examination of Prospective Financial Information
What type of assurance is provided in a compilation engagement?
No assurance
Which service involves examining the financial information for use in legal proceedings?
Forensic Accounting/auditing
What is the main focus of due diligence services?
Assessing financial performance
Study Notes
Review Engagement
- Level of assurance provided regarding financial information: Limited assurance
- Primary objective: Express a conclusion as to whether, based on the procedures performed, anything has come to the reviewer's attention that causes the accountant to believe that the financial statements are not in all material respects in accordance with the applicable financial reporting framework
Procedures and Objectives
- Procedures NOT typically performed: Audit procedures (e.g. verification of inventories, observation of physical counts, confirmation of accounts receivable and payable)
- Primary purpose: Provide limited assurance that the financial statements are free of material misstatement
Reporting and Compliance
- Type of report typically expressed: Unmodified or modified review report
- Compliance requirement: Accountant must comply with the International Standard on Review Engagements (ISRE) issued by the International Federation of Accountants (IFAC)
Other Services
- Example of an agreed-upon procedure: Inventory count observation
- Type of assurance provided in a compilation engagement: No assurance
- Service that involves examining financial information for use in legal proceedings: Litigation support
- Main focus of due diligence services: Evaluating the financial and operational aspects of a business before a significant transaction (e.g. merger, acquisition)
Test your understanding of audit related services and other assurance and non-assurance services, including internal auditing, consultation, taxation, accounting, and more. Explore the relationship between assurance and non-assurance services.
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