Limited Assurance

Limited Assurance

AR-C 90.04 - The objective of the accountant when performing a review of financial statements is to obtain limited assurance as a basis for reporting whether the accountant is aware of any material modifications that should be made to the financial statements for them to be in accordance with the applicable financial reporting framework, primarily through the performance of inquiry and analytical procedures.

Independence in a Review Engagement

Independence in a Review Engagement

AR-C 90.07 - The accountant is precluded from performing a review engagement if the accountant's independence is impaired for any reason.

Review Procedures

Review Procedures

The accountant should apply professional judgment in determining the specific nature, timing, and extent of review procedures. Such  procedures should be tailored based on the accountant's understanding of the industry in which the client operates and the accountant's knowledge of the entity. Review evidence obtained through the performance of analytical procedures and inquiry will ordinarily provide the accountant with a reasonable basis for obtaining limited assurance.

  • Firm Principles

    Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful.
    Samuel Johnson
    To aim at excellence, our reputation, and friends, and all must be ventured; to aim at the average we run no risk and provide little service.
    Oliver Goldsmith
    Real excellence and humility are not incompatible one with the other, on the contrary they are twin sisters.
    Jean Baptiste Lacordaire
    There is no twilight zone of honesty in business. A thing is right or it's wrong. It's black or it's white.
    John F. Dodge
    The highest reward for a person's toil is not what they get for it, but what they become by it.
    John Ruskin
    Integrity is the essence of everything successful.
    Richard Buckminster Fuller
    Excellence is the gradual result of always striving to do better.
    Pat Riley
    The harder you work, the harder it is to surrender.
    Vince Lambardi
    Genius is one percent inspiration and ninety-nine percent perspiration.
    Thomas Edison
    Integrity is the first step to true greatness. Men love to praise, but are slow to practice it. To maintain it in high places costs self-denial; in all places it is liable to opposition, but its end is glorious, and the universe will yet do it homage.
    Charles Simmons
    No man should advocate a course in private that he's ashamed to admit in public.
    George McGovern
    Excellence is doing ordinary things extraordinarily well.
    John W Gardner
    We are what we repeatedly do. Excellence, then, is not an act, but a habit.
    Aristotle
    Every noble work is at first impossible.
    Thomas Carlyle
    It is not from ourselves that we learn to be better than we are.
    Wendell Berry
    A racehorse that consistently runs just a second faster than another horse is worth millions of dollars more. Be willing to give that extra effort that separates the winner from the one in second place.
    H. Jackson Brown Jr
    The integrity of men is to be measured by their conduct, not by their professions.
    Junius
    An honest man's the noblest work of God.
    Alexander Pope
    Man's biggest mistake is to believe that he's working for someone else.
    Nashua Cavalier
    If it is not right do not do it; if it is not true do not say it.
    Marcus Aurelius
    Morality may consist solely in the courage of making a choice.
    Leo Blum
    I hope I shall possess firmness and virtue enough to maintain what I consider the most enviable of all titles, the character of an honest man.
    George Washington
    Honesty is the first chapter in the book of wisdom.
    Thomas Jefferson
    Honesty is the cornerstone of all success, without which confidence and ability to perform shall cease to exist.
    Mary Kay Ash
    Would you want to do business with a person who was 99% honest?
    Sidney Madwed
    A life lived with integrity -- even if it lacks the trappings of fame and fortune is a shinning star in whose light others may follow in the years to come.
    Dennis Waitley
    There are two kinds of people, those who do the work and those who take the credit. Try to be in the first group; there is less competition there.
    Indira Gandhi
    The daily grind of hard work gets a person polished.
    Source unknown
    I would give no thought of what the world might say of me, if I could only transmit to posterity the reputation of an honest man.
    Sam Houston
    Excellence can be attained if you care more than others think is wise, Risk more than others think is safe, Dream more than others think is practical, and Expect more than others think is possible.
    Anon
    There is always a best way of doing everything.
    Ralph Waldo Emerson
    It is not what we eat but what we digest that makes us strong; not what we gain but what we save that makes us rich; not what we read but what we remember that makes us learned; and not what we profess but what we practice that gives us integrity.
    Francis Bacon

Reviews

A review is a service which falls somewhere in between a compilation and an audit.  In reporting on a compilation engagement, a CPA will not provide any level of assurance that the financial statements are presented in accordance with the reporting framework whereas an audit report will express a “high level” of assurance that the financial statements are free from material misstatements.  A review engagement will provide “limited” assurance that the financial statements are in conformity with the reporting framework.

The Compilation and Review Standards AR-C Section 90 paragraph .04 states “The objective of the accountant when performing a review of financial statements is to obtain limited assurance as a basis for reporting whether the accountant is aware of any material modifications that should be made to the financial statements for them to be in accordance with the applicable financial reporting framework, primarily through the performance of inquiry and analytical procedures.”

In a review service, a CPA will obtain an understanding of the client and the industry and  the CPA will perform analytical procedures and conduct inquiries to assist the CPA in obtaining the requires limited assurance.  A review service also required a representation letter from management on their responsibilities concerning the financial statements and related information.  However, these procedures are much less comprehensive as compared to the procedures required by an audit.

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