A2 (7) - ATTEST ENGAGEMENTS Flashcards Preview

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Flashcards in A2 (7) - ATTEST ENGAGEMENTS Deck (20):
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I. MAIN CHARACTERSTICS - Trust services (related to IT)

1- Web Trust Engagements - e-commerce
2- Sys Trust Engagements - defined electronic system

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I. MAIN CHARACTERSTICS - Statements on Standards for Attestation Engagements (SSAE)

1- Agreed-upon procedures
2- Financial forecasts and projections
3- Pro forma financial statements
4- Internal control over financial reporting
5- Compliance for specific engagement
6-Management's Discussion and Analysis (MDA)

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SSAE NOT APPLY

1- Audits.
2- Compilations and reviews of the FSs
3- Return preparation (income tax, franchise, other).
4- Advocating for the client (litigation services).
5- Providing consulting/advisory services
6- Operational audits by internal auditors

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ATTESTATION STANDARDS CHARACTERSTICS

1- Issued by senior technical bodies of the AICPA
2- No reference is made to financial statements
3-No reference is made to GAAP
4- provide levels of assurance less than GAAS
5- limited use report is provided
6-Departures from mandatory requirements must be justified

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ATTESTATION STANDARDS - Five general standards

1- Training and proficiency
2- Independence.
3-Due professional care in planning and performance
4-Professional, adequate knowledge of subject matter
5- Your belief that the subject matter is capable of evaluation against criteria that are suitable and available to users.

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ATTESTATION STANDARDS - Two fieldwork standards

1- Planning and supervision

2- Appropriate, sufficient evidence to provide a reasonable basis for the conclusion

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ATTESTATION STANDARDS - Four reporting standards

1- Identify the Subject matter or the assertion being reported

2-Disclose ~significant reservations about the engagement

3-Express conclusions about the subject matter or the assertion relation to the established or stated criteria

4- Restrict use of the report to specified parties.

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SCOPE LIMITATION

1- Examination :- - qualified , disclaimer ,OR withdrawal
2- Review :- withdrawal

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LACK OF ADEQUACY OF DISCLOSURE OR CONFIRMITY WITH CRITERIA

1- Examination :- - qualified or adverse opinion
2- Review :- modified conclusion

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II. AGREED-UPON PROCEDURES ENGAGEMENTS

1- Independence of the Practitioner
2- Agreement of the Parties
3- Measurability and Consistency
4- Sufficiency of the Procedures
5-Use of the Report is Restricted to the Specified Parties
6- Client is Responsible for the Subject Matter

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II. AGREED-UPON PROCEDURES ENGAGEMENTS - Reporting

see the report

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III. PROSPECTIVE FINANCIAL STATMENTS - FINANCIAL FORECASTS vs PROJECTIONS

Financial Forecast :- the expected financial results of a future period based on expected conditions

Financial Projection :- A projection reflects the financial position and results of operations based on a "what if,"type of scenario (hypothetical assumptions.)

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Typed of engagement of Prospective Financial Statements

1- Compilation engagement
2- Examination engagement
3- Agreed-upon procedures engagement

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Prospective Financial Statement Summary

See the important table

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IV. PRO FORMA FINANCIAL STATEMENTS

Show what the significant effects on the historical
financial information might have been had the transaction [or event] occurred at an earlier date

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PRO FORMA FINANCIAL STATEMENTS - main characteristics

1- Pro forma FSs may be examined or reviewed

2- Obtain an understanding of the event

3-Evaluate the pro forma adjustments, including any assumptions

4- A practitioner's report should make reference to the financial statements from which the historical financial information is derived, and state whether such financial statements were audited or reviewed.

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V. REPORTING ON AN ENTITY'S CONTROL OVER FINANCIAL REPORTING

Auditing & Attestation 5.

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VI.COMPLIANCE ATIESTATIONS

The practitioner will generally perform an agreed-upon procedures engagement, but may perform an examination.

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VII. MANAGEMENT'S DISCUSSION AND ANALYSIS

REPORT that management of a public company issues with audited financial statements.

The requirements for MD&A are established by the SEC

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VII. MANAGEMENT'S DISCUSSION AND ANALYSIS - Auditor responsibilities

MUST obtain an understanding of these requirements before undertaking an examination or review of the MD&A.