cona_ex1


Exhibit 1: Compilation of Financial Statements Under the New ED
1 Submission of financial statements: Presenting to a client or third parties financial statements that the accountant has generated either manually or through the use of computer software.

2 Compilation of financial statements: Presenting in the form of financial statements information that is the representation of management (owners) without undertaking to express any assurance on the statements.

3 Third parties: All parties except for members of management who are knowledgeable about the nature of the procedures applied and the basis of accounting or assumptions used in the preparation of the financial statements.

4 The engagement letter signed by management or the letter issued to management should include:

  • The nature and limitations of the services to be performed.
  • That management is responsible for the entity’s financial statements.
  • That no opinion or any other form of assurance on the financial statements will be provided.
  • That the financial statements have not been reviewed or audited.
  • Acknowledgement of management’s representation and agreement that the financial statements will not be used by third parties.
  • That the financial statements cannot be relied upon to disclose errors, fraud or illegal acts.

The communication should also include the following additional matters, if applicable:

  • Substantially all disclosures required by GAAP may be omitted.
  • Material departures from GAAP may exist and the effects of those departures on the financial statements may not be disclosed.
  • Lack of independence.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

TECHNOLOGY Q&A

How to create maps in Excel 2016

Microsoft Excel 2016 has two new mapping capabilities. J. Carlton Collins, CPA, demonstrates how to make masterful 2D and 3D maps in Excel 2016.

QUIZ

News quiz: Economy and health care changes top CPAs’ list

CPA decision-makers’ economic outlook and the House Republicans’ proposed tax changes as part of replacing the Patient Protection and Affordable Care Act received attention recently. See how much you know with this short quiz.