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Flashcards in Deck 4 Deck (21):

Securities Act of 1933

Provides that underwriters, among others, could be held liable for material omissions or misstatements in a registration statement


If a report on a review of interim financial information is presented in a registration statement, the prospectus should include what? a statement that the report is not a "report" or "part" of the registration statement

A statement that the report is not a "report" or "part" of the registration statement


If the quarterly data required by SEC Regulation S-K have been omitted, the auditor's report must include what?

A statement indicating that the company has not presented such data.


What is an auditors responsibility for supplementary information?

The auditor should perform limited procedures on required supplementary information


What is supplementary information?

Information that is presented outside the basic financial statements


When a disclaimer of opinion is issued due to a lack of sufficient audit evidence, the lack of evidence should be disclosed where?

In the Auditor's Responsibility paragraph and discussed in an additional paragraph before the opinion paragraph


Attest engagement

One in which a CPA is engaged to issue an examination, a review, or an agreed-upon procedures report on subject matter, or on an assertion about the subject matter, that is the responsibility of another party


A report on agreed-upon procedures should include what?

List of procedures performed and the related findings; should be in the form of procedures and findings; an opinion is not provided; sufficiency of the procedures is the responsibility of the specified parties


Statements on Standards for Attestation Engagements provide what kind of guidance?

Guidance with respect to compilation of a financial projection, but they do not address services involving advocating for a client, such as testifying as an expert witness.


WebTrust Engagement

Attestation engagement designed to measure transaction integrity, information protection, and disclosure of business practices (provide assurance related to e-commerce)


Partial presentations

Presentations of prospective financial information which would not ordinarily be appropriate for general use because they omit one or more of these essential elements: (a) sales or gross revenue, (b) gross profit or cost of sales, (c) unusual or infrequently occurring items, (d) provision for income taxes, (e) discontinued operations or extraordinary items, (f) income from continuing operations, (g) net income, (h) earnings per share, and (i) significant changes in financial position


SysTrust engagement

An attest engagement that provides assurance on the reliability of any defined electronic system


Pro forma financial statements

One that shows historical financial statements as they would have been if a hypothetical event had occurred


Trust services

Assurance and advisory services used to address the risks and opportunities related to information technology


Examples of Trust services

WebTrust engagements and SysTrust engagements


Six major attestation services:

1. Agreed-upon procedures
2. Financial forecasts and projections
3. Pro forma financial statements
4. Internal control over financial reporting
5. Compliance (as a specific engagement)
6. Management's discussion and analysis (MD&A)


Statements on Standards for Attestation Engagements (SSAE)

Established by the AICPA, provide information addressing the major attestation services


Attestation standards

A framework for attest function beyond historical financial statements


Eleven attestation standards



What kind of assurance does an examination provide?

Positive assurance


What kind of assurance does a review provide?

Negative assurance (disclaimer of opinion)