Reviews, Compilations, and Preparation Engagements

Reviews, compilations, and preparations appear on approximately 10-15% of AUD exam questions, with the exam focusing on the critical distinctions between the three engagement types. The #1 AICPA trap is confusing the assurance levels and independence requirements — remember, only reviews require independence AND provide assurance. A detail candidates frequently miss: under SSARS 21 (AR-C 90), the review conclusion uses very specific negative assurance language ('I am not aware of any material modifications that should be made for the financial statements to be in accordance with [framework]'), and the report must include a statement that a review is substantially less in scope than an audit. Also note that when a CPA has PREPARED the financial statements AND is then engaged to compile them, SSARS 21 (AR-C 80) requires the compilation report — the preparation legend alone is insufficient once a compilation engagement is accepted.