Preparation engagements: Avoid these common mistakes

Even though there are minimal requirements associated with a preparation engagement, our analysis of peer review Matters for Further Consideration (MFCs) for the 2017 and 2018 years pertaining to engagements to prepare financial statements indicated numerous issues. In fact, we noted over 300 MFCs which pertained to preparation engagements performed under AR-C 70, Preparation of Financial Statements. In our analysis of MFCs, we found four key areas that accounted for the majority of the issues: engagement letters, assurance disclaimers, special purpose frameworks, and omission of disclosures. This report discusses those more common mistakes and the proper requirements for avoiding them.