It's intended to help accountants better understand their professional responsibilities when performing engagements to prepare financial statements
, compilations or reviews.
* The primary purpose of financial statements
should be to reflect management's stewardship to existing stockholders.
Second, a significant deficiency is a single deficiency or combination of deficiencies that results in a more than remote likelihood that a misstatement of the annual or interim financial statements
that is more than inconsequential will not be prevented or detected.
TEI also observed that the dual standard for recognition and derecognition of tax benefits--and the corresponding resources required to document whether an enterprise satisfies the dual recognition standards--will impose substantial implementation and ongoing costs on financial statement
issuers without enhancing the reliability of the financial statements
13, Compilation of Specified Elements, Accounts, or Items of a Financial Statement
Questions 1-3 ask about corporate financial statements
and publicly traded common stock.
But users of financial statements
, including policyholders and regulators, are better served when the profession's ability to shift risk is curtailed.
They may be sued for fraud or gross negligence if the third party could be expected to rely on fraudulent financial statements
Formal and informal methods of communication include financial statements
such as annual reports and announcements, as well as management's choices of financing options and organizational incentives.
If a co-op or condo does not comply with the new requirement, and does not conduct a study, the accountant should include a footnote to this effect in the property's audited financial statement
. It is then necessary to indicate the coop or condo's intention to utilize available cash, borrow funds, increase maintenance, or levy special assessments to fund repairs or replacements, or the association's intention to delay repairs and replacements until funds are available.
It also recommends implementing these provisions earlier where financial statements
have not yet been issued or when other interim financial statements
But, while the users of public company financial statements
are more easily identifiable, the definition of "user" to a privately held company may vary.