Analytics

The CPA must form expectations about the numbers in financial statements being reviewed
Expectations are predictions of what the recorded amounts and ratios will be.

These are developed by identifying plausible relationships based on the CPA's knowl-
edge of the client and industry.

 Sources of expectations include prior periods, budgets, industry data, and

nonfinancial
data.

 The CPA must document significant expectations and identify the factors considered
in
developing them.

Management Representations

Accountant must obtain a representation letter of management responsibility for

Fair presentation of the financial statements

 Complete and truthful responses to all inquiries

 Prevention and detection of fraud and disclosure to CPA of suspected fraud

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Reporting - Module 4

Review Report
Report on reviewed financial sta ements should state

A review was performed in accordance with SSARS issued by the AICPA

Information in financial statements is representation of management
Review consists of inquiries & APs

Review is substantially less than audit intended to express opinion on financial state-
ments
No opinion is expressed

 Accountant not aware of material modifications needed to conform financial

statements
to GAAP unless indicated in report
Report dated as of completion of inquiries & APs
Each page of reviewed financial statements should refer to report
"See Accountant's Review Report"

Report may not refer to a predecessor accountant by name in the report unless the predecessor
accountant's practice was acquired or merged with the successor accountant.

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