When providing limited assurance that the financial statements of a nonpublic entity require no material modifications to be in accordance with generally accepted accounting principles, the accountant should
- Assess the risk that a material misstatement could occur in a financial statement assertion.
- Confirm with the entity’s lawyer that material loss contingencies are disclosed.
- Understand the accounting principles of the industry in which the entity operates.
- Develop audit programs to determine whether the entity’s financial statements are fairly presented.