AUD SSARS coverage for reviews, compilations, preparation engagements, reports, and assurance limits.
This chapter separates non-audit service levels that still fall within AUD scope. The main issue is understanding what level of assurance, if any, is provided, what procedures are performed, and what report language is appropriate under SSARS.
SSARS questions are usually service-level questions. The correct answer depends on whether the accountant is engaged to prepare financial statements, compile them, or perform a review that provides limited assurance.
| Service type | What to decide first | Common AUD trap |
|---|---|---|
| Preparation | Whether the accountant is only preparing statements and provides no assurance. | Adding compilation or review report expectations to a preparation engagement. |
| Compilation | Whether management information is presented without assurance. | Treating compilation as limited assurance. |
| Review | Whether inquiry and analytical procedures support limited assurance. | Expecting audit-level evidence from review procedures. |
| Report language | What assurance level, responsibility language, and limitations must be communicated. | Choosing report wording before identifying the service level. |
| Step | What to identify | Reporting consequence |
|---|---|---|
| Engagement request | Preparation, compilation, or review. | Determines whether assurance is absent, disclaimed, or limited. |
| Accountant responsibility | What procedures are expected and what management retains responsibility for. | Prevents overperforming or overstating the service. |
| Independence status | Whether independence is required or must be disclosed. | Independence affects report wording in compilation contexts. |
| Evidence level | No assurance, no verification, or limited-assurance inquiry and analytics. | Procedure expectations change by service level. |
| Report or legend | Required report language, disclosure, or no-assurance legend. | The final communication must match the service performed. |
| Checkpoint | Preparation | Compilation | Review |
|---|---|---|---|
| Assurance provided | None. | None. | Limited assurance. |
| Typical procedures | Prepare financial statements from information provided by management. | Read the statements and consider whether they appear appropriate in form and free from obvious material misstatement. | Perform inquiry and analytical procedures. |
| Independence effect | Independence is not required for the service. | Lack of independence may be disclosed in the compilation report. | Independence is required for a review. |
| Report or communication | No assurance report; statements should indicate no assurance unless the accountant is engaged to report. | Compilation report disclaims assurance. | Review report expresses limited assurance in negative form. |
| Exam warning | Do not add verification procedures by default. | Do not call it limited assurance. | Do not treat it as an audit or as reasonable assurance. |