Beruflich Dokumente
Kultur Dokumente
Chapter 22 Planning
1
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 21 Standards and Related Topics
SUMMARY
***Memorize***
General Standards
Standards of Reporting
Implicit
TIP
QUALITY CONTROL
The nature and extent of a CPA firm’s quality control depend on 1) the firm’s size 2) the nature of the
firm’s practice 3) cost-benefit
2
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
***Memorize***
POINTS
SEE - Evidence – sufficient appropriate evidence
Quality control is not part of GAAS, GAAS is the measures of auditors’ performance
A successor auditor usually need/can review virtually all the predecessor’s WP
3
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 22 Planning (25%)
SUMMARY
FRAUD
i. Fraud risk factors
1. High turnover
2. Rapidly changing technology
3. Chang = risk
4. Aggressive earnings projections
5. Considerable competition
6. Negative cash flows
7. Off-shore holding companies
ILLEGAL ACTS
i. Auditor’s responsibilities:
Evaluate risk factors and give reasonable assurance that there are no illegal acts that have a direct effect
on the f/s
4
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
UNDERSTANDING WITH CLIENTS – ENGAGEMENT LETTER
***Read***
***Read***
INFORMATION COMMUNICATED WITH AC
POINTS
During the initial planning phase, auditors will discuss with mgt the NET of the audit work
If specific information comes to the auditor’s attention that provides evidence concerning the existence of
possible illegal acts that could have a material indirect effect on the financial statements, the auditor
should apply audit procedures specifically directed to ascertaining whether an illegal act has occurred.
Draft of audit program addressing NET is required
5
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 23 Internal Control (15%)
SUMMARY
i. Understanding Entity and its environment (SEE) affect the
9 Nature if IC is weak, CR high, use ↑ outside evidence
9 Extent of audit procedures if IC is weak, need to gather more evidence
9 Timing if IC is weak, testing will have to be done at
YE instead of interim (substantive tests vs. TOC)
***Memorize***
9 Authorization
9 Record
9 Custody
Risk Assessment – risk facing the entity instead of auditor CR
Information and Communications – accounting system
Monitoring
Control Environment – tone of the org, e.g. management’s attitude
6
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
v. Changes of controls
***Memorize***
STEPS IN THE AUDIT – (MEMORIZE!!)
1) Establish understanding with client
9 Services to be performed
9 Objective of the audit
9 Limitations(reasonable assurance)
9 Space / Staffing requirement
9 Fees
9 Auditor / management’s responsibilities
2) Obtain understanding of entity and its environment, including its IC
NET
Risk assessment procedures
3) Assess risk of material misstatement in f/s assertions – IR, CR
4) Design and perform audit procedures to address the risk of material misstatement
9 Test of controls
9 Substantive tests
5) Evaluate audit evidence
6) Form opinion and issue report – public company, w/p reviewed by a 2nd partner
7) Understand IC Æ Control risk assessment Æ Perform Toc Æ Assess Results Æ Substantive
testing
***Memorize***
IC QUESTIONNAIRE – see P9 week 3
7
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
SIGNIFICANT DEFICIENCIES AND MATERIAL WEAKNESS
Auditors are not required to search for significant deficiencies / material weakness, but may report to
management / governance if find any (implicitly)
If mentioned in the report, should state that the auditor is not expressing an opinion on IC.
Need to report in each audit regardless of previous communication
Written communication should be no later than 60 days following report release date
Control deficiency Æreport: Significant deficiency Æ report: Material weakness (more and more serious)
TRANSACTION CYCLES
i. Purchase and AP
Department Documents
Sales Æ Prenumber Sales Order
Credit (Authorization) Credit Approval (Valuation) Æ
Shipping (Custody) Shipping Documents (BOL) Æ
Billing (Record) Prenumber Invoices Æ
Accounting (Record) Record transaction in Sales/AR sub-ledger
8
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
9
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
POINTS
Immediately upon receiving checks from customers by mail, a responsible employee should prepare a
duplicate listing of checks received
Audit evidence concerning segregation of duties ordinarily is best obtained by observing the
employees as they apply control procedures
Debit Memo – AP; Credit memo – AR
The person who last signs the checks should keep control of them until they are mailed.
All receipts for goods, including returned goods or materials, should be handled by the receiving clerk.
Analytical procedures and confirmations are usually for substantive tests.
AP department do 3-way match
10
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 24 Evidence and Procedures (35%)
SUMMARY
***Memorize***
AUDIT PROCEDURES
i. Test of controls
1. Observation
2. Inquiry
3. Inspection
4. Re-perform procedures
ii. Substantive tests
1. Analytical procedures
2. Tests of details
3. Confirmation
Audit evidence obtained directly by the auditor (e.g. observation, confirmation, calculation) is more
reliable than audit evidence obtained indirectly or by inference (outside)
INTERNAL AUDIT
Internal auditors cannot be used to make judgement/assessment (e.g. assess IR and CR )
In performing an audit, the auditor may request direct assistance from the internal auditors, in obtaining
an understanding of the internal control structure or in performing tests of controls or substantive tests.
Competence – educational background
Objectivity – level to report, scope
11
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
***Memorize***
MANAGEMENT REPRESENTATIONS
1. FS fairly presented in conformity with GAAP
2. Availability of financial records and minutes
3. No Noncompliance or deficiencies in financial reporting practices
4. No material misstatement
5. No fraud
6. No plan/intention of affecting CV of asset/liability
7. No material misstatement of Related party, guarantee, uncertainties
8. Material Violation of laws, contingencies
9. Title of ownership of assets, any collateral
10. Compliance of contractual agreements
11. Management’s belief of no material misstatements, no unrecorded subsequent events
*dated the same date as the audit report
ANALYTICS
Analytical procedures alone may provide the appropriate level of assurance for some assertions.
Analytical procedures used in planning an audit generally use data aggregated at a high level
Analytical procedures used in planning an audit should focus on enhancing the auditor's understanding of
the client's business
POINTS
CPA owns w/p, but needs client’s permission to show to a third party
Un-reconciled differences between control and subsidiary accounts causes an auditor to suspect that
material misstatements exist in a client's financial statements.
Specialist work: The auditor should obtain an understanding of the methods or assumptions used by
the specialist and evaluate whether the specialists findings support the related assertions in the financial
statements. The work of a specialist who has a contractual relationship with the client may be acceptable
under certain circumstances
Normally, the auditor should not refer to the work or findings of the specialist, specially for standard
qualified opinion.
12
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 25 Audit Programs
SUMMARY
SUBSEQUENT EVENTS
1. Type 1
9 Conditions existed at balance sheet date
9 Require adjustment to f/s
9 Dual dating (if disclosed) is required in order to extend responsibility only to the subsequent
event
9 No change of dating is required if just adjust f/s numbers instead of disclose in notes
2. Type 2
9 Conditions did not exist at b/s date
9 May require disclosure, no adjustments
9 Dual dating is required for
- Casualty losses
- Purchasing a business or selling off a component of business
- Issuance of stock
- Issuance of debt
***Memorize***
How to look for subsequent events - MIRACL
POINTS
Observation of inventory could be performed before b/s date
Positive confirmation is the best evidence for AR
Lapping - the theft of one customers payment and subsequently crediting the customer with payment
made by another customer. SOD is the best way to deter it.
Test of credit approval is for the assertion of Valuation or allocation (AFDA)
Auditors review the reconciliation of payroll tax form to identify potential liability for unpaid payroll taxes
13
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 26 Statistical Sampling
SUMMARY
TYPES OF SAMPLING
1) Attribute sampling
9 Test of control
9 Test for certain attribute or characteristic
2) Variable sampling
9 Substantive tests
9 Estimate the dollar value, how much vary from a stated amount
9 Variability ↑ uncertainty, ↑ sample sizes
9 Use Standard Deviation as a measure
NORMAL DISTRIBUTION
Mean
50% 50%
SAMPLING METHOD
1) Mean-per-unit Estimation
Population Total = Audited Sample total value / sample size * population size
2) Ratio Estimation
9 Ratio = Audited Sample total value/Book Sample value Point Estimate
9 Population value = Ratio * Book Population value
3) Difference Estimation
[Difference b/w audit value & BV] / Size (S) * Size (P) + Book Value (P)
4) Projection:
9 68%/95% of population within 1/1.96 standard deviation of mean
9 SD = SE2
14
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
SAMPLING STEPS
1) Define the population
2) Choose method
3) Determine sample size
4) Determine acceptable risk level
RISK - AR = IR*CR*DR
AR, DR, IR, CR + Sampling Risk
SAMPLING RISK
1) Alpha risk
9 Test of Control: Risk of under-reliance – too much substantive testing
9 Substantive Test: Risk of incorrect rejection – was correct, give qualified opinion
2) Beta risk
9 Test of Control: Risk of over-reliance – too little substantive testing
9 Substantive Test: Risk of incorrect acceptance – was incorrect, give unqualified opinion
Sample Size
Expected Deviation rate (Variability) / Direct (higher variability, larger size)
Expected amount of misstatement
Tolerable deviation Rate / Tolerable Inverse (lower %, larger size)
Misstatement Rate
Assess risk of assessing control risk Direct (higher assessed risk, larger size)
too low / Assess misstatement risk (1
less assessed risk = confidence level)
Allowable risk of assessing control Inverse (higher risk willing to assume,
risk too low / Allowable misstatement smaller size)
risk
Population size Almost no effect if >5,000
Achieved upper precision limit = Observed sample rate + Allowance for sampling risk
Increase planning CR if Achieved upper precision limit > Tolerable rate
15
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
PPS - Probability-proportional-to-size
PPS is a form of variables sampling that uses attribute sampling theory for substantive testing. The
sampling unit is the individual dollar in an account balance. PPS sampling has two unique properties.
***Memorize***
POINTS
Weakness of randomness: if the population has a pattern, may obtain misleading results
Stratified sampling – split a highly variable population into two populations to reduce variability
Discovery sampling – type of attribute sampling, a predetermined probability of discovering one
item, used with critical items when expected error rate is very low – used for fraud
Decide to increase the allowable risk of incorrect rejection (Alpha) – Less work to do, when
1) Decreased reliability from the sample is desired
2) Few differences (audit value minus recorded value) are expected.
3) Initial sample results support the planned level of control risk
4) The cost and effort of selecting additional sample items is low
16
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
SUMMARY
TYPES OF CONTROL
i. General control
ii. Application control
1) Input
9 Properly Initiated, authorized, and approved
9 Check digits, valid character checks, self-checking, control totals, harsh totals, error log
2) Processing
9 Limit and reasonableness test (e.g. salary range of staff vs. management)
3) Output
9 Control totals, error log
***Memorize***
Test deck (test data) – use auditor data on client computer (test invalid conditions)
Parallel simulation – use client data on auditor’s computer
Integrated test facility – test data is commingled with live data
17
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
POINTS
9 Utility programs are used to perform tasks such as copying, sorting, merging, and printing. This
type of software is usually easily accessible and can lead to unauthorized changes if not properly
controlled.
9 A computer log provides evidence as to which employees used the computer system and the
operations performed by them. As a result, the computer log will protect against unauthorized use
of the IT system, and it will provide an audit trail.
9 When an auditor anticipates assessing control risk at a low level in a computerized environment,
generally, the auditor initially would focus on general control procedures
9 When a client processes financial data in electronic form without paper documentation, the auditor
may audit on a more continuous basis than a traditional system
Never combine
9 Computer operators (key in data) vs. computer programmer
9 Security administrators vs. computer operators and computer programmers
9 Internal control is considered ineffective when computer department personnel can: (1) originate
or correct transactions, (2) authorize transactions, (3) prepare the initial data, (4) maintain
custody or control over non-EDP assets, (5) authorize a change in controls, or (6) originate
master file changes.
9 Preventive controls are generally more important than detective controls in EDI systems because
of the speed with which goods and services are delivered.
9 The purpose of an audit trail would be to 1) monitor the system, 2) answer queries, and 3) deter
fraud.
9 A parity check is an extra bit attached to the end of a string of bits to detect errors resulting from
electronic interference when transmitting the string.
9 Embedded audit modules are coded into a clients application to collect data for the auditor.
18
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
SUMMARY
A. Title (“Independent” must be included)
B. Addressee (report to the company, stockholders, BOD, not management)
C. Introductory paragraph
- A statement that f/s is audited
- A statement that f/s are the Responsibility of the management and that the auditor’s Responsibility
is to express an opinion
D. Scope paragraph
- A statement that the Audit was conducted in Accordance with US GAAS
- A statement that the audit was Planned and Performed to obtain reasonable assurance that the f/s
are free from Material Misstatement
- Statements that the audit included Examining Evidence on a test basis; Assessing the Accounting
principles used and significant estimates Made by Management; and evaluating the overall
presentation;
- A statement that the audit provides a reasonable basis for an opinion
19
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
E. Opinion paragraph
- A statement referring to the f/s identified in the introductory paragraph
- An opinion as to the fair presentation of f/s (ACDE)
- A statement regarding conformity with US GAAP (ACDO)
F. Reporting Date ‐ The date of completion of fieldwork is used
OTHER OPINIONS
i. GAAP Problem
Opinion Situation Introductory Scope Explanatory Opinion
Qualified Material - - Before “Except
opinion for”
Adverse Very - - Before Modified
material opinion
***Memorize***
Qualified opinion paragraph
In our opinion, except for the effects of xxx as discussed in the preceding paragraph…
Adverse opinion paragraph
In our opinion, because of the effects of the matters discussed in the preceding paragraphs, the financial
statements referred to above do not present fairly, in conformity with U.S. generally accepted accounting
principles, the financial position of X Company as of xxx, or the results of its operations or its cash flows
for the years then ended.
ii. GAAS Problem
Opinion Situation Introductory Scope Explanatory Opinion
Qualified Material - “Except Before “Except
for” opinion for”
Disclaimer Very Modified Omitted Before Modified
material opinion
***Memorize***
Qualified
9 Scope paragraph
Except as discussed in the following paragraph, we conducted our audit
9 Opinion paragraph
20
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
In our opinion, except for the effects of xxx/omission of information as discussed in the preceding
paragraph…
Disclaimer
9 Introductory
We were engaged to audit …. Responsibility of the Company’s management (Omit audit’s
responsibility sentence)
9 Opinion
Since we were not able to apply other auditing procedures to satisfy ourselves as xxx, the scope of
our work was not sufficient to enable us to express, and we do not express, an opinion on these
financial statements.
EXPLANATORY LANGUAGE
i. Other auditors’ work
9 Always inquire the professional reputation and independence of the other auditor
1) Assume responsibility
9 Review WP and audit programs of the other auditor.
9 No mention / reference of other auditor in the auditor’s report
2) Divide responsibility
9 Usually happened when the principal CPA cannot review w/p of the other
9 Mention / reference the other auditor, but not the exact name of the auditor
9 All paragraph modified
21
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
ii. Comparative statements
***Memorize***
1) Update last year’s qualified/adverse opinion when client has corrected them
Intro/Scope – No change
Add explanatory paragraph before opinion paragraph
GOING CONCERN
Factors to mitigating the GC – management plans:
***Memorize***
1) Dispose of assets
2) Borrow money or restructure debt
3) Reduce / delay expenditures
4) Increase ownership equity - issue shares
The accompanying financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note X to the financial statements, the Company has
suffered recurring losses from operations and has a net capital deficiency that raise substantial
doubt about its ability to continue as a going concern. Management’s plans in regard to these
matters are also described in Note X. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
If substantial doubt about the GC existed at the date of prior period f/s that are presented on a
comparative basis, and that doubt has been removed in the current period, the explanatory
paragraph included with the auditor’s report should not be repeated
22
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
POINTS
Piece meal opinion (e.g. AR is misstated, but AP is ok) is not allowed, but different opinion for different
statement, or opinion on only 1 statement engagement is ok.
Confirming w/ third party the details of arrangements to maintain financial support may indicate
substantial doubt of GC
If lack of independent Æ Disclaimer
Very Material effects of GC & Uncertainty Æ Disclaimer, if GC not disclosed adequately Æ qualified /
adverse
If the auditor is engaged to audit the financial statements of a company that is not the auditors client, the
report should be addressed to the client (engage company) and not to the directors or stockholders of
the company being audited.
When there is a change in the accounting principles referred to the change in an explanatory paragraph,
identify the nature of the change, and refer the reader to the note in the financial statements that
discussed the change in detail.
When an auditor qualifies an opinion because of a scope limitation, the opinion paragraph should
indicate that the qualification pertains to the possible effects on the financial statements and not to
the scope limitation itself.
The predecessor auditor should, before reissuing a report, obtain a letter of representation from the
successor auditor & management.
Auditor is not required to audit supplementary information unless it’s omitted/material deficiency
23
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 29 Other Auditing Standards
SUMMARY
GOVERNMENT AUDITING
GAO (Government Accountability Office) is responsible for promulgating GAS (Governmental Auditing
Standards)
CPA firm audits in accordance with GAS need external quality review at least once every 3 years
***Memorize***
GAS requires:
1. A statement of the views of the responsible officials concerning the auditor’s findings in the
auditor’s report if it discloses deficiencies in internal control, fraud, illegal acts, violations of
contracts or grant agreement provisions, or abuse.
2. A statement of indications of illegal acts discovered during the audit.
3. A written report
o The assertion that evaluating compliance with laws, rules, and regulations with a direct
and material effect on the f/s is part of developing an opinion on f/s
o The assertion that specific controls relating to financial reporting are considered
o An indication that either no weakness was found or reportable conditions were found, and
separately indicate material weaknesses from other significant deficiency.
24
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
POINTS
An auditor’s procedures are not part of a company’s ICOFR.
It’s possible for an effective ICOFR and still has material weakness.
25
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 30 Other Types of Reports
SUMMARY
***Memorize***
FIVE TYPES OF SPECIAL REPORTS
Auditor’s Report
Introductory
9 Balance sheet Æ replaced by “Statement of Assets & Liabilities”
9 Income statement Æ “Statement of Revenue collected & Expenses Paid”
9 No statement of cash flows
Scope: Same
Explanatory
9 Before opinion
9 Explain the basis of account (reference to note) & state “This is an OCBOA”
Opinion:
9 State if statements are in conformity with OCBOA
26
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Opinion:
9 Negative assurance– independence required
“Nothing came to our attention that would cause us to believe the f/s were not in conformity
with GAAP”
9 “However, it should be noted that our audit was not directed primarily toward obtaining
knowledge of such noncompliance.”
9 Restricted use
27
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Chapter 31 Other Services
SUMMARY
Compilation and Review follow SSARS (Statements on Standards for Accounting and Review Services)
instead of GAAS
COMPILATIONS
***Memorize***
Sample report
We have complied the accompanying balance sheet of XYZ Company as of xxx, and the related
statements of income, retained earnings, and cash flows for the year then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by the American Institute
of Certified Public Accountants
A compilation is limited to presenting, in the form of f/s, information that is the representation of
management (owners). We have not audited or reviewed the accompanying f/s and, accordingly, do
not express an opinion or any other form of assurance on them.
REVIEW
1. Procedures
Inquire
Analytical
28
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
3. Review of non-public company
Follow SSARS, not GAAS
Not required to obtain Understanding of IC
Perform inquiries and analytical
Obtain management letter
GAAP problem: add explanatory paragraph after opinion paragraph, withdraw if significant
GAAS problem does not require modification
Limited assurance after disclaimer
General use
Each page is stamped “See Accountant’s Review Report”
***Memorize***
Sample report
Independent Accountant’s Report
We have reviewed the accompanying balance sheet of X Company as of xxx, and the related
statements of income, retained earnings, and cash flows for the year then ended, in accordance with
Statement on Standards for Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these financial statements is the
representation of the management of X Company.
A review consists principally of inquiries of company personnel and analytical procedures applied to
financial data. It is substantially less in scope than an audit in accordance with U.S. generally
accepted auditing standards, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the
accompanying financial statements in order for them to be in conformity with U.S. generally accepted
accounting principles.
29
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
30
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
Forecasts Projections
General use Restricted use
Expected future financial position Given certain hypothetical assumptions
1. Levels of service
Examination (similar to audit) – opinion or disclaimer
Compilation – disclaimer of opinion
Agreed-upon procedures – present findings, restricted use
2. SSAE (Statements on Standards for Attestation Engagements) defer from GAAS (TIP
SEE ACED)
E.g. compliance with law, IC, projection/pro forma
No “Understanding of entity and its environment, including IC required” (SEE)
***Memorize***
Reporting standards
Assertion identified
Conclusion
Reservations
Distributions (general or restricted use)
AGREED-UPON PROCEDURES
Written assertion relating to specified elements, accounts, or items
Describe agreed-upon materiality limits
State that an audit was not done and disclaimer of opinion
Similar to mgt responsibility – Client’s responsible for sufficiency of procedures
List procedures and findings
List any reservations
No negative assurance
Restricted use
31
2007‐2008 [THANK YOU FOR USING MAGGIE’S CPA NOTES]
***Memorize***
Inherent limitations paragraph
Because of inherent limitations in any internal control, misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal controls over financial
reporting to future periods are subject to the risk that internal controls may become inadequate
because of changes in conditions, or that the degree of compliance with policies or procedures
may deteriorate.
Opinion
Management’s assertions fairly stated / xxx company maintain effectiveness of IC based on
[criteria]
Could be qualified / adverse if have material weakness
An engagement to express an opinion on an entity’s system of IC and a consideration of internal
control made as part of an audit differ in purpose and scope; however, the procedures are similar
in nature.
POINTS
Merely reproducing client-prepared financial statements without modification is merely making a
copy of the financial statements, not a compilation.
Internal Control is not considered in compilation.
Attesting doesn’t including advocacy for clients
Even for a compilation, accountant should not issue report for comparative f/s if there is inconsistency
in GAAP required disclosure.
When unaudited f/s are presented in comparative form with audited f/s in documents filed with the
SEC, such statements should be clearly marked as unaudited but not referred to in the auditor’s
report, and the unaudited report should be either:
Reissued, or
Include a separate paragraph describing the responsibility assumed for the unaudited f/s
The practitioners report on pro forma financial information should include ... reference to the financial
statements from which the historical financial information is derived
No requirement that a compilation report be printed on paper (including letterhead) or that it be signed
manually.
32