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Audit > Study Unit 19 - SSAEs - Examination, Review, And Agrees-Upon Procedures Engagement > Flashcards

Study Unit 19 - SSAEs - Examination, Review, And Agrees-Upon Procedures Engagement Flashcards

1
Q

Under SSAEs, what is the purpose of attestation engagements?

A

To provide users of information with an opinion or conclusion regarding subject matter or an assertion about the subject matter.

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2
Q

Under SSAEs, what are the two types of attestation engagements?

A
  • Examinations
  • Reviews
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3
Q

Compare the three engagements under SSAEs in terms of level of assurance.

A

Issue Level of assurance

Examination Positive (Reasonable)

Review Negative (Limited)

Agreed-Upon
Procedures None

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4
Q

What are the consequences of the responsible party’s refusal to provide a written assertion in each type of attestation engagement under SSAEs?

A

Identity of
Responsible Examination Review Agreed-upon
Party Procedures

Engaging
Party & w/d w/d no assertion
Responsible required
Party - same

Engaging
Party &
Responsible Disclose disclose No assertion
Party - not refusal refusal required
Same in report in report

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5
Q

What are the documentation requirements of attestation engagements under SSAEs?

A

What
- Description of the nature, timing, and extend of procedures performed
- Identification of specific items or matters tested
Who
- Who performed the work
- Who reviewed the work
When
- Date the work was completed
- Date and extent of the review of the work

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6
Q

Compare the three engagements under SSAEs in terms of (1) requirement for independence and (2) requirement for written assertion.

A

Issue Examination Review Agreed-upon
Procedures

Independence
Required Yes Yes Yes

Written Yes, if the same as No, but lack
Assertion engaging exam- of assertion
Required? party is the ination disclosed
responsible in report
party

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7
Q

Compare the three engagements under SSAEs in terms of type of report issued.

A

Issue Type of report

Examination opinion on fairness
Review conclusion about the need for material modifications
Agreed-upon procedures Findings of specific procedures

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8
Q

Compare the three engagements under SSAEs in terms of amount of evidence required.

A

Issue Amount of evidence

Examination Sufficient and appropriate to support conclusion
Review Sufficient and appropriate to support conclusion
Agreed-upon Procedures Findings of specific procedures

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9
Q

Compare the three engagements under SSAES in terms of amount to restriction in use.

A

Issue Restriction in use

Examination Yes, if the subject matter is only for limited parties
Review Yes, if the subject matter is only for limited parties
Agreed-upon Procedures Yes, if the subject matter is only for limited parties

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10
Q

Describe an attestation examination under SSAEs.

A

In an attestation examination, the independent practitioner expresses an opinion in writing on
- The fairness of an assertion by the responsible party, in all material respects
- Whether the subject matter (not general-purpose financial statements) is in accordance with (or based on) suitable
criteria, in all material respects

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11
Q

Describe an attestation review under SSAEs.

A

In an attestation review, the independent practitioner
- obtains limited assurance about whether any material modification are needed
- expresses a conclusion in a written report about whether the practitioner is aware of any modification needed
- communicates further as required

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12
Q

Compare an SSAEs review and an SSARSs review.

A

SSAEs Review SSARSs Review

Provide limited assurance about Provide limited assurance about
Whether material modifications whether material modifications
Should be made should be made

Subject matter for it to Financial statement for them
Confirm to suitable criteria to be in accordance with the
financial reporting framework

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13
Q

In an attestation review under SSAEs, is an adverse conclusion expressed when the misstatement is material and pervasive?

A

The SSAEs do not provide for an adverse conclusion. The practitioner should withdraw from the engagement.

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14
Q

Describe an agreed-upon procedures engagement under SSAEs.

A

In an attestation agreed-upon procedures engagement, the independent practitioner performs specific procedures on subject matter and reports findings without providing an opinion or conclusion.

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15
Q

When should the report for an agreed-upon procedures engagement be dated?

A

The date of the report is not earlier that the completion of agreed-upon procedures and determination of findings.

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16
Q

Which type of SSAEs engagement is not permitted for prospective financial statements?

A

Attestation reviews are not permitted for prospective financial statements.

17
Q

What are the two types of prospective financial statements under SSAEs?

A
  • Financial forecasts
  • Financial projections
18
Q

Compare a financial forecast and a financial projection under SSAEs.

A

A financial forecast is based on the responsible party’s assumptions reflecting conditions it expects to exist and the course of action it expects to take.

A financial projection is based on the responsible party’s assumptions reflecting conditions it expects would exist and the course of action it expects would be taken given one or more hypothetical assumptions.

19
Q

Under SSAEs, what type of attestation on which type of prospective financial statement is appropriate for general use?

A

Only an examination report on a financial forecast is appropriate for general use.

20
Q

In an attestation examination engagement of prospective financial statements, what is the type of opinion expressed for failure relating to the significant assumptions?

A

Relating to significant assumptions Adverse opinion

Not relating to significant assumptions Qualified opinion

21
Q

Describe pro forms financial information (PFFI) under SSAEs.

A

Pro forma financial information (PFFI) shows “what the significant effects on historical financial information might have been had a consummated or proposed transaction (or event) occurred at an earlier date”.

22
Q

Describe a compliance attestation engagement under SSAEs.

A

In a compliance attestation engagement the practitioner provides assurance about the entity’s compliance with specified requirements (e.g., laws, regulations, rules, contracts or grants).

23
Q

Which type of SSAEs engagement is not permitted for compliance attestation?

A

Attestation reviews are not permitted for compliance attestation.

24
Q

What SSAEs engagement may be performed on management’s discussion and analysis (MD&A)?

A
  • Examination
  • Review
  • Agreed-upon procedures

Audit (20 decks)

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