What are some examples of nonattest services and the level of understanding that the client designee should possess in order to comply with Interpretation No. 101-3?
Bookkeeping—When the member performs routine bookkeeping services for an audit, review, or compilation client, the member should be satisfied that the designated individual understands the reason why the journal entries are being proposed and the effect they have on the financial statements. For recurring or standard journal entries (for example, depreciation), the designated individual may require no explanation regarding the reason for the entry (for example, when the member has previously discussed these entries with the client), whereas for more complex journal entries (for example, deferred taxes), the member may need to explain to the client the reason and basis for the entry and its impact on the financial statements. In any case, the individual should be in a position to approve the proposed journal entries and accept responsibility for the company’s financial statements. Tax Services—For tax return preparation engagements, the individual designated by the client need not have
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