Compiled financial statements represent the most basic level of service that certified public accountants provide with respect to financial statements. In a compilation, the CPA must comply with certain basic requirements of professional standards, such as having a knowledge of the client's industry and applicable accounting principles, having a clear understanding with the client as to the services to be provided, and reading the financial statements to determine whether there are any obvious departures from generally accepted accounting principles (or, in some cases, another comprehensive basis of accounting used by the entity). It may be necessary for the CPA to perform "other accounting services" (such as creating a general ledger for the client, or assisting the client with adjusting entries for the books of the client (before the financial statements can be prepared). Upon completion, a report on the financial statements is issued that states a compilation was performed in accordance with AICPA professional standards, but no assurance is expressed that the statements are in conformity with generally accepted accounting principles. This is known as the expression of "no assurance." Compiled financial statements are often prepared for privately-held entities that do not need a higher level of assurance expressed by the CPA.
An engagement letter form is a written agreement between a professional service provider and their client, outlining the terms and conditions of their engagement. It serves as a crucial legal document that sets expectations, responsibilities, and potential liabilities for both parties involved. There are different types of engagement letter forms, including: 1. Professional Services Engagement Letter: This type of engagement letter form is commonly used by professionals such as lawyers, accountants, consultants, and other service providers. It specifies the scope of the services to be provided, the fees and billing arrangements, the expected timeline, and any limitations or exclusions. 2. Contractor Engagement Letter: A contractor engagement letter is specifically designed for contractors or freelancers who offer their services on a project basis. It outlines the scope of work, resources required, deliverables, payment terms, and project timelines. Additionally, it may also include clauses related to confidentiality, intellectual property rights, and termination conditions. Keywords: engagement letter form, detailed description, professional service provider, client, terms and conditions, legal document, expectations, responsibilities, liabilities, different types, professional services, lawyers, accountants, consultants, scope of services, fees, billing arrangements, timeline, limitations, exclusions, contractor, freelancer, project basis, scope of work, resources, deliverables, payment terms, project timelines, confidentiality, intellectual property rights, termination conditions.