Jonny Incorporated, a registered accounting practice, renders financial statement engagements for clients across the South African Republic. The following queries were forwarded to the technical department headed by Mr. Simpson

At a training session conducted by the training department, Mr.Simpson emphasized the inclusion of the following statement in the financial statements "The accounting policies were reviewed and considered to be appropriate for the organisation." A newly appointed trainee was concerned with this statement as the practice uses standardised/template compilation reports and was therefore uncertain as to what additional work should be performed when the statement relating to the accounting policies are included.

Required:

1. Discuss what procedures the compiler of the financial statements should perform before stating that the accounting policies are appropriate for the business.