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PSA 120
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Compilations
18. In a compilation engagement, the accountant4 is engaged to use
accounting
expertise as opposed to auditing expertise to collect, classify and summarize
financial information. This ordinarily entails reducing detailed data to a
manageable and understandable form without a requirement to test the
assertions
underlying that information. The procedures employed are not designed and
do
not enable the accountant to express any assurance on the financial
information.
However, users of the compiled financial information derive some benefit as
a
result of the accountant's involvement because the service has been
performed
with due professional skill and care.
Auditor Association with Financial Information
19. An auditor5 is associated with financial information when the auditor
attaches a
report to that information or consents to the use of the auditor's name in a
professional connection. If the auditor is not associated in this manner, third
parties can assume no responsibility of the auditor. If the auditor learns that
an
entity is inappropriately using the auditor's name in association with financial
information, the auditor would require management to cease doing so and
consider what further steps, if any, need to be taken, such as informing any
known
third party users of the information of the inappropriate use of the auditor's
name
in connection with the information. The auditor may also believe it necessary
to
take other action, for example, to seek legal advice.
Acknowledgment
20. This Framework of Philippine Standards on Auditing is based on ISA 120,
Framework of International Standards on Auditing, issued by the
International
Auditing Practices Committee of the International Federation of Accountants.
21. This PSA differs from ISA 120 with respect to the deletion of the section
on
Public Sector Perspective included in ISA 120.
4 See footnote 1.
5 This includes an accountant engaged to perform compilation engagements.
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PSA 120
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This Philippine Standard on Auditing 120 was unanimously approved on
October 29,
2001 by the members of the Auditing Standards and Practices Council:
Benjamin R. Punongbayan, Chairman Antonio P. Acyatan, Vice Chairman
Felicidad A. Abad David L. Balangue
Eliseo A. Fernandez Nestorio C. Roraldo
Arturo G. San Gabriel Joaquin P. Tolentino
Joycelyn J. Villaflores Carlito B. Dimar
Froilan G. Ampil Jose T. Valencia
Horace F. Dumlao Isagani O. Santiago
Eugene T. Mateo Emma M. Espina
Edijer A. Martinez