Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Audit, review, compilation, preparation. Assurance or not? Attestation or not?

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Here’s a distinction between the levels of services and the assurance/attestation cutoffs.

Disclaimer:  I attended an A&A update a few months ago (yes, yes, I know – this series of posts has been on the back burner for a long while). Since I’m going to paraphrase comments from speakers who were presenting their personal opinion, I’m not going to mention their names. Just know that these aren’t my original ideas, but you can blame me if you don’t like the way I phrase things.

A presenter from the AICPA reminded us of these distinctions:

  • Audit – both an assurance and attestation engagement
  • Review – both an assurance and attestation engagement
  • Compilation – This is an attestation engagement but not an assurance engagement
  • Preparation (the proposed new service) – This is neither an assurance nor attestation engagement.

In a compilation, we are not obtaining assurance on the financial statements.

In a preparation engagement, we are not performing (assuming it is approved as a service) an attestation engagement.

The impact of that distinction is preparation engagements would not be included in the scope of a peer review. Compilations are included in a peer review.

Written by Jim Ulvog

February 14, 2014, 7:28 am at 7:28 am

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