1. Accept the engagement
Client risks, acceptance or continuance, and the firm's independence. A prohibited situation that is checked but not declared is flagged. On a first engagement, the letters to the predecessor accountant are added to the file.
2. Understand and plan
Knowledge of the entity, its cycles and year-end cut-off. Materiality is calculated from the trial balance: you choose the base and the percentage, Ledger proposes performance materiality and the clearly trivial threshold. Each line item is then compared to materiality and proposed as significant or not. A time budget and an engagement plan are available if you want them.
3. A program for each line item
Cash, receivables, inventories, capital assets, payables, debt, equity, revenue, expenses: each line item has its program, with its inquiries and analytical procedures. A program only gets a tab if its items have amounts. A non-significant item, with no risk identified and no procedure planned, can be limited to its conclusion.
4. Complete
Going concern, related parties, commitments and contingencies, subsequent events, journal entries, legal counsel, and changes in policies or estimates. Uncorrected misstatements add up and are compared to final materiality.
5. Conclude and report
You state the nature of the matter, if there is one (misstatement or limitation), and whether it is pervasive. Ledger derives the conclusion: unmodified, qualified, adverse, or disclaimer of conclusion. The review engagement report carries it and prints with the financial statements, in English or French, with the paragraphs you need: going concern, special purpose framework, other matter, restriction on distribution.