Alejandro Buhong and Villamor CPAs
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Transcript of Alejandro Buhong and Villamor CPAs
8/9/2019 Alejandro Buhong and Villamor CPAs
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D I B B L E
A N D
D A B
B L E,
C P A
C A S E
S T
U D Y
s
8/9/2019 Alejandro Buhong and Villamor CPAs
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Dibble and Dabble, CPAs for China Corporation, are taskedto revie the !nan"ial state#ents of the "o#pan$%
Thro&'ho&t the revie, reservations on !nan"ial state#entsare indi"ated% The CPA as said to be (&neas$) toards the!ndin's%
Ulti#atel$, there is no a"t of fra&d "o##itted in relation tothe validit$ of the !ndin's%
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A+ -LE -. T/E EN0A0E1ENT LETTE DUIN0PE.-1ANCE -. A E2IE3 -. A CL-SELY /ELDC-1PANY4
• Documentation of the agreement between the CPA and theclient regarding the scope and limitations of theengagement.
5#ini#i6es f&t&re #is&nderstandin's and las&its%
• Protection from legal liability:
5"an for# the basis of an e7e"tive defense in the event of a "lai#%
5Trial 8&ries t$pi"all$ do not have a sophisti"ated &nderstandin' ofthe variet$ and pre"ise feat&res of servi"es perfor#ed b$ CPAs% Inrenderin' their 8&d'#ents, the$ #&st therefore heavil$ rel$ ondocumentation and live testi#on$ eviden"in' "o##&ni"ationsbeteen the CPA and the "lient% In the absen"e of an en'a'e#entletter, de"isions re'ardin' disp&tes "on"ernin' level of servi"e tend
to favor clients #ore often than CPAs%
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• help CPAs establish a positive basis for communicationwith clients.
- help to avoid e9pe"tation 'aps for servi"es to berendered% Takin' steps to establish "lear e9pe"tationspro#otes this positive ord5of5#o&th and e9pands b&siness
a""ordin'l$% B$ :ohn 1".adden, CPA, C.E and :oseph 3olfe,Dire"tor of isk 1ana'e#ent A""o&ntantsProfessional Liabilit$ CNA Pro%
A+ -LE -. T/E EN0A0E1ENT LETTE DUIN0PE.-1ANCE -. A E2IE3 -. A CL-SELY /ELDC-1PANY4
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TYPICAL EN0A0E1ENT LETTE ELE2ANT T- DIBBLE ANDDABBLE, CPAS AND C/INA C-P-ATI-N4
Objective of the servi"e bein' perfor#ed%
anagement!s responsibility for the .inan"ial state#ent%
The scope of the revie%
Unrestri"ted access to hatever re"ords, do"&#entation andother infor#ation re;&ested in "onne"tion ith the revie%
A sample of the report e9pe"ted to be rendered%
The fa"t that the en'a'e#ent cannot be relied upon todisclose errors, ille'al a"ts or other irre'&larities, e9a#ple ofhi"h in"l&des fra&d or defal"ations that #a$ e9ist%
A state#ent that an audit is not being performed andthat an a&dit opinion ill not be e9pressed% To e#phasi6e thispoint and to avoid "onf&sion, the a&ditor #a$ also "onsiderpointin' o&t that a revie en'a'e#ent ill not satisfy anystatutory or third party re"uirements for an a&dit%
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#ross $egligence
Dibble and Dabble "an be responsible for bein' 'rossl$ne'li'ent d&rin' the revie pro"ess% As per the reason that the$didn<t took appropriate pro"ed&res and 8&st holl$ relied on therepresentations of the #ana'e#ent on so#e "ertain entries hi"h
Dibble hi#self had felt &neas$% .or an$ ass&ran"e servi"e, #a$ it bea revie or an a&dit, responsible CPA #&st p&t into pra"ti"eProfessional Skepti"is#% Th&s, sho&ld have taken In;&iries and tookAnal$ti"al Pro"ed&res "on"ernin' the validit$ of that "ertain entries%
C+ P-TENTIAL LIABILITY T/AT DIBBLE AND DABBLE 1AY.ACE