Public accountants are qualified to provide a range of services related to financial statements. Among the services are reviews and compilations, which are less comprehensive than audits, which are required for publicly owned companies. Statements on Standards for Accounting and Review Services are issued by the Accounting and Review Services Committee, which is the senior technical committee of the American Institute of Certified Public Accountants (AICPA) designated to issue pronouncements in connection with the unaudited financial statements or other unaudited financial information of a nonpublic entity.

Nature of Engagements Contrasted with an Audit

A reviewis less than an audit inasmuch as a reviewdoes not involve obtaining an understanding of internal control, assessing control risk, testing accounting records, and obtaining corroborating evidence to support the financial information shown in the financial statements. The public accountant provides limited assurance with a review. This type...