Review Engagements - New and Expanded Guidance on Analytical Procedures Inquiries and Other Procedures

This practice aid is designed to help accountants perform more effective review engagements and to implement Statement on Standards for Accounting and Review Services (SSARS) No. 10, Performance of Review Engagements, an amendment to SSARS No. 1, Compilation and Review of Financial Statements.

Provided is a detailed overview of review engagement procedures and the changes made by SSARS No.10 regarding analytical procedures, inquiries, documentation, fraud, management representations, and more. 

Also featured are:

• illustrative examples of analytical procedures
• inquiries and documentation
• practice pointers
• implementation Q&As
• reprints of SSARS No.'s 10 and 11 and SSARS Interpretation No. 26

Introduction

Review Engagements - New and Expanded Guidance on Analytical Procedures, Inquiries, and Other Procedures is a practice aid designed to help CPAs perform more effective review engagements and to implement Statement on Standards for Accounting and Review Services (SSARS) No. 10, Performance of Review Engagements (AICPA, Professional Standards, vol. 2, AR sec. 100). This practice aid clarifies certain existing SSARS, suggests ways of implementing existing and new standards in special circumstances, and provides practical guidance to help implement the changes to SSARS No. 1, Compilation and Review of Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 100).

Overview of A Review Engagement And The Changes Made by SSARS No. 10

A review of financial statements under SSARS No. 1 consists of two phases. First, through inquiry and analytical procedures, you gather a limited amount of information to determine whether a client's financial statements are presented in accordance with generally accepted accounting principles (GAAP).¹ Second, based on the limited amount of information you collect, you express limited assurance on the financial statements. That limited assurance states that you "are not aware of any material modifications that should be made to the financial statements in order for them to be in conformity with GAAP."