Compilations, reviews and audits: the skills required relative to public confidence

• Published in: The CPA journal (1975) 1994-07, Vol.64 (7), p.42
• Main Authors: Bailey, Larry P, Pendergast, Marilyn A
• Format: Article
• Language: English
• Subjects: Accountants; Accounting; Accounting policies; Audit engagements; Auditing standards; Audits; Comparative analysis; Compilation & review; CPAs; Financial statements; Inventory; Licenses; Practice; Professional standards; Review engagements; Services; Skills; Tax basis
• ISSN: 0732-8435

Pressure is continuing from some quarters to drop the requirement that performance of review and compilation services be restricted to CPAs and other licensed accountants. In the mistaken notion that only limited skills are required for compilations and reviews, proponents seek to persuade legislators to make this important and growing class of professional work available to a wider group who are neither adequately prepared nor subject to regulation. The myth that these services do not require the training equivalent to that of the CPA conducting an audit is dispelled. A discussion is presented of the numerous phases of these services where professional skills are vital requisites to both reviews and compilations, including: 1. level of assurance, 2. evidence and evaluative skills, 3. GAAP disclosure, 4. internal control understanding, 5. independence, 6. the going-concern assumption, and 7. peer review.