Professional competence and review engagements

An implication for the public, the accounting profession, and individual CPA firms revolves around the recent suggestion that, while public accountants should not be allowed to audit financial statements, they do have the necessary background to perform review and compilations. In general, financial...

Full description

Saved in:
Bibliographic Details
Published in:The CPA journal (1975) 1991-07, Vol.61 (7), p.58
Main Author: Bailey, Larry P
Format: Article
Language:English
Subjects:
Accountants
Accounting firms
Accounting policies
Audit engagements
Auditing
Auditors
Audits
Conformity
Education
Financial statements
GAAP
Inventory
Management
Practice
Professional development
Review engagements
Skills
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:An implication for the public, the accounting profession, and individual CPA firms revolves around the recent suggestion that, while public accountants should not be allowed to audit financial statements, they do have the necessary background to perform review and compilations. In general, financial statements may be presented in accordance with generally accepted accounting principles (GAAP) or other comprehensive bases of accounting. There is no suggestion in the standards or in practice that a lesser level of accounting expertise is acceptable for someone who performs a review as opposed to an audit engagement. The nature of a review engagement means that most of the activity requires a relatively high level of evaluative skills. Such a skill level often is needed to implement analytical procedures and recognize unexpected relationships. The accounting profession should guard against the public perception that a review engagement is not as demanding as the performance of an audit engagement.
ISSN:0732-8435