Considerations for Changing Engagement to Compilation of Financial Statements

In the accounting industry, it is not uncommon for engagements to be modified or changed during the course of a project. When Davis, a CPA, is requested to change the engagement to a compilation of financial statements by Tech Resources, there are several important considerations that Davis should keep in mind.

What should Davis consider before changing the engagement?

When Davis is requested by Tech to change the engagement to a compilation of financial statements, Davis should consider the following:

1. Assessment of Qualifications: The CPA should assess whether they are qualified to conduct a compilation engagement. This requires a thorough understanding of the differences between an audit and a compilation engagement, as well as ensuring the necessary knowledge and abilities to complete a compilation engagement.
2. Reasons for Conversion: The CPA should examine the reasons behind the conversion of the engagement to a compilation. If Tech Resources is requesting the change, it is crucial to assess whether the reasons are relevant and legitimate. If there are suspicions of fraudulent intentions, the CPA should refuse the engagement.
3. Legal Advice: Before agreeing to change the engagement, Davis should seek legal advice if there are any uncertainties or legal implications. Working with an attorney will help both parties come to a resolution that meets their needs.

When Davis is requested by Tech to change the engagement to a compilation of financial statements. The CPA will work with the attorney to come up with a resolution that meets the needs of both parties. What should Davis consider?

When Davis is requested by Tech to change the engagement to a compilation of financial statements, Davis should consider the qualifications for the engagement, the reasons for the change, and seek legal advice if necessary to ensure a smooth transition that is in the best interest of both parties.