Auditing aicpa, assurance and attestation services
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AUDITING CHAPTER 18 Other Assurance & Attestation Services By David N. Ricchiute
Transcript of Auditing aicpa, assurance and attestation services
AUDITINGCHAPTER 18
Other Assurance & Attestation ServicesByDavid N. Ricchiute
GBW 8th ed., Ch. 182
TOPICS
AICPA Special Committee on Assurance ServicesAssurance services Attestation services
GBW 8th ed., Ch. 183
ASSURANCE vs. ATTESTATION SERVICES
Assurance services Improve or report on information
Attestation services Offer assurance about a matter that is
responsibility of another party
GBW 8th ed., Ch. 184
ASSURANCE SERIVCES
Electronic commerceHealth care performanceRisk assessmentInformation systems reliabilityBusiness performanceElder care
GBW 8th ed., Ch. 185
ELECTRONIC COMMERCE ASSURANCES: WebTrust
CPA offers assurance in form of opinionData integrity Does processing alter
transactions?
Data security Do systems preclude
unauthorized disclosure?
GBW 8th ed., Ch. 186
DATA SECURITY
Parties to a transaction are authenticTransactions, documents are protected
GBW 8th ed., Ch. 187
WEBTRUST PRINCIPLESPrinciple The CompanyBusiness practices
Discloses, executes transactions in accord with its business practices for e-commerce
Transaction integrity
Maintains effective controls to assure e-transactions completed, billed as agreed
Information protection
Maintains effective controls to assure customer privacy
GBW 8th ed., Ch. 188
ELECTRONIC COMMERCE ASSURANCES: SysTrust
CPA offers assurance in form of opinionReliability of company’s information system Availability Security Integrity Maintainability
GBW 8th ed., Ch. 189
SYSTRUST PRINCIPLES
Principle The Company’s SystemAvailability Available for operation per
service agreements
Security Protected against unauthorized physical, logical access
IntegrityMaintainability
Complete, accurate, timely, authorizedUpdated as required providing for availability, security, integrity
GBW 8th ed., Ch. 1810
HEALTH CARE ASSURANCES:Examples
Testing research programs (UC-SD) for False insurance claims Unjustifiable billings Illegal use embryos
Benchmarking performanceQuality assurance for healthcare
GBW 8th ed., Ch. 1811
PAST CORE COMPETENCIES
Knowledge of accounting principles, auditing standardsFacility in evaluating evidenceKnowledge how to manage riskTack in engaging, maintaining clients
GBW 8th ed., Ch. 1812
ATTESTATION SERVICES
ReviewCompilation OCBOAOther
GBW 8th ed., Ch. 1813
REVIEW ENGAGEMENT: Non-Public Companies
Complies with attestation standardsProcedures Inquiries Analytical procedures
Report Negative assurance Accountant “not aware of any material
modifications” necessary for GAAP
GBW 8th ed., Ch. 1814
ANALYTICAL PROCEDURES FOR REVIEWS
Analytical procedures to identify unusual matters Compare current to prior
period financials Compare financial to
budgets, forecasts Study relationships for
predictable patterns
GBW 8th ed., Ch. 1815
INQUIRIES FOR REVIEWS
Inquiries about Accounting principles, practices,
GAAP Actions of Board Reports of subsidiaries’ accountants Changes in entity’s business,
accounting principles Questions, concerns Subsequent events
GBW 8th ed., Ch. 1816
COMPILATION ENGAGEMENT: Non-Public Companies
“presenting in the form of financial statements information that is the representation of management without undertaking to express any assurance on the statements”
SSARS No. 1
GBW 8th ed., Ch. 1817
REQUISITE KNOWLEDGE FOR COMPILATIONS
Knowledge of accounting principles, practices in industryUnderstanding of entity’s transactions, accounting records, & qualifications of accounting personnel
GBW 8th ed., Ch. 1818
COMPILATION REPORT
States explicitly thatAudit not performedOpinion not expressed
GBW 8th ed., Ch. 1819
INTERIM FINANCIAL STATEMENTS: Public Companies
Reviews required by SEC for 10-Q of publicly traded companiesReviews not adequate to form opinion Report gives negative assurance
GBW 8th ed., Ch. 1820
INTERIM REVIEW: Analytical Procedures
Analytical procedures to identify unusual matters Compare interim to prior interim Compare recorded amounts, ratios to
budgets, forecasts, industry gross margin
Consider plausible relationships, ratios Compare disaggregated revenue
information
GBW 8th ed., Ch. 1821
INTERIM REVIEW: Other Procedures
Inquiries about Internal controls, changes Reports of subsidiaries’ accountants Changes in entity’s business, accounting
principles Questions, concerns Subsequent events
Read board minutesConsider conformity with GAAPObtain management’s written representation
GBW 8th ed., Ch. 1822
COMPREHENSIVE BASES OF ACCOUNTING OTHER THAN GAAP
4 generally accepted comprehensive bases of accountingCash basisRegulatory basisTax basisCriteria having substantial support Price-level adjusted statements
GBW 8th ed., Ch. 1823
SPECIFIED ELEMENTSIncludes Accounts or items of financial
statements Nonfinancial statement assertions
Procedures & report GAAS & express opinion Agreed-upon procedures & express
limited assurance
GBW 8th ed., Ch. 1824
AGREED-UPON PROCEDURES
Procedures are engagement specificProcedures not sufficient to express opinionProvides limited assurance
GBW 8th ed., Ch. 1825
OTHER ATTEST ENGAGEMENTS
Compliance with contracts, regulationsLetters for underwritersFinancial forecasts, projectionsPersonal financial statementsApplication of accounting principles
