Section 1: 15–25%A1

Nature and Scope of Engagements

Exam insight

Expect 2-3 MCQs per sitting on engagement types and assurance levels. Most wrong answers come from swapping the assurance levels. Audits give reasonable assurance and reviews give limited assurance, so blur the two and you land on the wrong choice. One detail people miss: SSAE 19 removed the use restriction on agreed-upon procedures reports, so AUP reports can now go to general use. Know these cold: AU-C 200 (overall objectives), SSARS 21/25 (reviews, compilations, preparations), and SSAE 18/19 (attestation engagements).

What AICPA wants you to know

1Distinguish between audits, reviews, compilations, and preparation engagements
2Identify the level of assurance provided by each engagement type
3Understand attestation engagements vs. direct engagements
4Explain the role of the auditor in a financial statement audit
5Recognize other assurance services such as agreed-upon procedures

Patterns in this topic

The exam re-skins the same archetypes. Recognize these here, then drill them in the Pattern Lab.

The Assurance LadderEach engagement buys a different level of assurance, and the report and procedures follow from it.The SSARS PlaybookFor compilations, preparations, and reviews, independence, legends, and reports each follow a fixed rule.The Government AuditThe Single Audit turns on the one million dollar threshold, and Yellow Book supplements GAAS.

Exam tip

Study smarter: before you expand each card, cover the screen and try to recall what the concept means from its title alone. Retrieving it from memory builds the recall the exam actually tests, and it beats re-reading.