This chapter described CPA services on historical financial information other than audits of corporation financial statements in accordance with U.S. generally accepted accounting principles. To summarize:

• Special reports by auditors refer to those on: (a) financial statements prepared in accordance with some other comprehensive basis of accounting; (b) specified elements, accounts, or items of financial statements; (c) compliance with contractual or regulatory requirements; (d ) special-purpose financial presentations; and (e) financial information presented in prescribed forms or schedules.

• There are several major differences between personal financial statements and those of other types of organizations. For example, assets and liabilities on personal financial statements are presented at their estimated current values and amounts. Accountants may audit, review, or compile personal financial statements.

• Management of a public company must engage CPAs to review the company's interim financial statements. If they are also engaged to issue a report, it will provide limited assurance that the financial statements contain no material departures from GAAP. The procedures performed in a review engagement consist of performing analytical procedures, making inquiries of management, reviewing minutes, and obtaining written representations from management. The accountants will adjust the specific procedures based on their knowledge of the client's internal control and business.

• Nonpublic companies may engage CPAs to review their annual or interim financial statements. The procedures involved are similar to those for the review of a public company, although the accountants are not required to obtain an understanding of internal control of a nonpublic company and the professional guidance provided is more general in nature.

• Letters for underwriters (comfort letters) provide assurance about various information contained in registration statements used for the sale of securities. They are designed to help the underwriters establish their due diligence requirement in investigating the fairness of the registration statement.

• When compiled financial statements are not expected to be used by a third party, either a compilation report may be issued or an understanding with the client may be documented through use of an engagement letter. When third-party reliance is anticipated, the accountants must issue a report that provides no explicit assurance. CPAs who are not independent may perform compilations.

Identify and describe the types of special reports that auditors issue.

Describe the auditors' responsibilities when auditing financial statements for use in other countries.

Explain the special considerations involved in auditing personal financial statements.

Describe the nature of a review of financial statements for public companies.

Describe the nature of a review of financial statements for nonpublic companies.

Discuss the issuance of letters for underwriters.

Explain the accountants' responsibilities when performing accounting services.