Presentation is loading. Please wait.

Presentation is loading. Please wait.

©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 1 Other Assurance Services Chapter 25.

Published byAlexandra Phelps Modified over 8 years ago

Similar presentations

Presentation on theme: "©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 1 Other Assurance Services Chapter 25."— Presentation transcript:

1

2 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 1 Other Assurance Services Chapter 25

3 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 2 Learning Objective 1 Distinguish AICPA attestation standards from auditing standards and know the type of engagements to which they apply.

4 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 3 Attestation standards Types of attestation engagements Levels of service Attestation Engagements

5 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 4 Types of Engagements and Related Reports ExaminationReviewAgreed-upon procedures proceduresExtensiveSignificantVaryingHighModerateVaryingPositiveNegativeFindingsGeneralGeneralLimited Type of engagement Amount of evidence Level of assurance Form of conclusionDistribution

6 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 5 Learning Objective 2 Understand the nature of WebTrust assurance services.

7 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 6 In a WebTrust assurance services engagement, a client engages a CPA to provide reasonable assurance that a company’s Web site complies with certain Trust Services principles and criteria for one or more aspects of e-commerce activities. WebTrust Services

8 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 7 The WebTrust service is a specific service developed under the broader Trust Services principles and criteria jointly issued in 2003 by the AICPA and CICA. WebTrust Services

9 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 8 Five Trust Services Principles Security The system is protected against unauthorized access (both physical and logical). Availability The system is available for operation and use as committed or agreed. Processingintegrity System processing is complete, accurate, timely, and authorized. Onlineprivacy Personal information obtained as a result of e-commerce is collected, used, disclosed, and retained as committed or agreed. Confidentiality Information designated as confidential is protected as committed or agreed.

10 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 9 Learning Objective 3 Understand the nature of SysTrust assurance services.

11 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 10 In a SysTrust engagement, the SysTrust licensed accountant evaluates a company’s computer system using Trust Services principles and criteria. SysTrust Services

12 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 11 A licensed SysTrust accountant may report on only one Trust Service principle or any combination of principles. SysTrust Services

13 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 12 Learning Objective 4 Describe special engagements to attest to prospective financial statements.

14 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 13 Prospective Financial Statements Forecasts and projections Use of prospective financial statements Types of engagements Examination of prospective financial statements

15 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 14 Learning Objective 5 Describe agreed-upon procedures engagements.

16 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 15 The SASs deal with financial statement items, whereas the SSAEs deal with nonfinancial statement subject matter. Agreed-upon procedures engagements under the SSAEs have been permitted and commonly performed since the original issue of the attestation standards. Agreed-Upon Procedures Engagements

17 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 16 Learning Objective 6 Understand the level of assurance and evidence requirements for review and compilation services.

18 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 17 The standards for compilations and reviews of financial statements are called: Review and Compilation Services

19 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 18 Relationship between Evidence Accumulation and Assurance Attained Level of Assurance Attained None(compilation) Moderate(review) High(audit) Minimal(compilation)Significant(review)Extensive(audit) Amount of Evidence Accumulated

20 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 19 A review service (SSARS review) engagement is designed to allow the accountant to express limited assurance that the financial statements are in accordance with GAAP. Review Services

21 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 20 Procedures Suggested for Reviews Obtain knowledge of the accounting principles of the client’s industry. Obtain knowledge of the client. Make inquiries of management. Perform analytical procedures. Obtain letter of representation.

22 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 21 1.Inquire as to the company’s procedures for recording, classifying, and summarizing transactions and disclosing information in the statements. 2.Inquire into actions taken at meetings of stockholders and the board of directors. 3.Inquire of persons having responsibility for financial and accounting matters. Make Inquires of Management

23 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 22 Form of Report 1.The first paragraph is similar to an audit report except for its reference to a review service rather than an audit. 2.The second paragraph notes that a review consists primarily of inquiries and analytical procedures. 3.The third paragraph expresses limited assurance in the form of a negative assurance that “we are not aware of any material modifications that should be made to the financial statements.”

24 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 23 If a client has failed to follow GAAP in a review engagement, a modification of the report is needed. Failure to Follow GAAP

25 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 24 Possess knowledge about the accounting Possess knowledge about the accounting principles and practices of the client’s industry. Know the client; the nature of the client’s Know the client; the nature of the client’s business transactions; and the basis, form, and content of the financial statements. Requirements for Compilation Establish an understanding with the client about Establish an understanding with the client about the nature and limitations of the services to be performed and a description of the report.

26 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 25 Make inquiries to determine whether Make inquiries to determine whether the client’s information is satisfactory. Read the compiled financial statements Read the compiled financial statements and be alert for any obvious omissions or errors in arithmetic and GAAP. Requirements for Compilation

27 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 26 Compilation with full disclosure: It requires disclosures in accordance with GAAP. Compilation that omits substantially all disclosures: This type of statement is usually expected to be used primarily for management purposes only. Compilation Form of Report Compilation without independence: A CPA firm can issue a compilation report even if it is not independent with respect to the client, as defined by the Code of Professional Conduct.

28 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 27 Learning Objective 7 Describe special engagements to receive interim information for public companies.

29 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 28 The requirements for reviews of interim information for public companies (SAS 100 reviews) are set forth by SAS 100 (AU 722). A SAS 100 review does not provide a basis for expressing a positive-form opinion. Interim Financial Information for Public Companies

30 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 29 There are ordinarily no tests of the accounting records, independent confirmations, or physical examinations. Interim Financial Information for Public Companies

31 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 30 Learning Objective 8 Describe other audit and limited assurance engagements related to historical financial statements.

32 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 31 Other Comprehensive Bases of Accounting Cash or modified cash basis Basis used to comply with the requirements of a regulatory agency Income tax basis A definite set of criteria having substantial support

33 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 32 Reporting Requirements Introductory paragraph Scope paragraph Middle paragraph stating the accounting basis Opinion paragraph

34 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 33 The specified elements, accounts, or items must be identified. The basis on which the specified elements, accounts, or items are presented and the agreements specifying the basis must be described. Specified Elements, Accounts, or Items

35 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 34 Source of significant interpretations made by the client about the provisions of a relevant agreement must be indicated and described. Specified Elements, Accounts, or Items

36 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 35 If the specified element, account, or item is presented on a basis that is not in conformity with GAAP, a paragraph that restricts the distribution of the report to those within the entity and the parties to the contract or agreement must be added. Specified Elements, Accounts, or Items

37 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 36 The engagement and report should be limited to compliance matters the auditor is qualified to evaluate. The auditor should provide a debt compliance letter only for a client for whom the auditor has done an audit of the overall financial statements. Debt Compliance Letters and Similar Reports

38 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 37 The auditor’s opinion is in the form of a negative assurance, stating that nothing came to the auditor’s attention that would lead the auditor to believe there was noncompliance. Debt Compliance Letters and Similar Reports

39 ©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 38 End of Chapter 25

Download ppt "©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 25 - 1 Other Assurance Services Chapter 25."

Similar presentations

Assurance Services Independent professional services that “improve the quality of information, or its context, for decision makers” Assurance service encompass.

Assurance Services Independent professional services that “improve the quality of information, or its context, for decision makers” Assurance service encompass.
Additional Assurance Services: Other Information

Additional Assurance Services: Other Information
Understanding Audit Reports

Understanding Audit Reports
1 - 1 ©2003 Prentice Hall Business Publishing, Essentials of Auditing 1/e, Arens/Elder/Beasley Assurance Services and the CPA Profession Chapter 1.

1 - 1 ©2003 Prentice Hall Business Publishing, Essentials of Auditing 1/e, Arens/Elder/Beasley Assurance Services and the CPA Profession Chapter 1.
Audit and Assurance services

Audit and Assurance services
Reports on Audited Financial Statements

Reports on Audited Financial Statements
©2010 Prentice Hall Business Publishing, Auditing 13/e, Arens/Elder/Beasley 3 - 1 Audit Reports Chapter 3.

©2010 Prentice Hall Business Publishing, Auditing 13/e, Arens/Elder/Beasley Audit Reports Chapter 3.
Special Reports and Accounting and Review Services.

Special Reports and Accounting and Review Services.
Chapter 20 Additional Assurance Services: Other Information

Chapter 20 Additional Assurance Services: Other Information
Other Assurance & Attestation Services By David N. Ricchiute

Other Assurance & Attestation Services By David N. Ricchiute
Assurance, Attestation, and Internal Auditing Services

Assurance, Attestation, and Internal Auditing Services
BA 427 – Assurance and Attestation Services Lecture 18 The Types of Services Offered by Public Accounting Firms.

BA 427 – Assurance and Attestation Services Lecture 18 The Types of Services Offered by Public Accounting Firms.
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 21-1 Chapter 21 CHAPTER 21 ASSURANCE, ATTESTATION, AND OTHER FORMS OF SERVICES.

McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter 21 CHAPTER 21 ASSURANCE, ATTESTATION, AND OTHER FORMS OF SERVICES.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 1 - 1 The Demand for Audit and Other Assurance Services Chapter 1.

©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder The Demand for Audit and Other Assurance Services Chapter 1.
23 - 1 Copyright  2003 Pearson Education Canada Inc. CHAPTER 23 Assurance Services: Attest Engagements.

Copyright  2003 Pearson Education Canada Inc. CHAPTER 23 Assurance Services: Attest Engagements.
Module A1 Other Public Accounting Services ACCT 4080.

Module A1 Other Public Accounting Services ACCT 4080.
25 - 1 ©2006 Prentice Hall Business Publishing, Auditing 11/e, Arens/Beasley/Elder Other Assurance Services Chapter 25.

©2006 Prentice Hall Business Publishing, Auditing 11/e, Arens/Beasley/Elder Other Assurance Services Chapter 25.
©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley 3 - 1 Audit Reports Chapter 3.

©2005 Prentice Hall Business Publishing, Auditing and Assurance Services 10/e, Arens/Elder/Beasley Audit Reports Chapter 3.
9.401 Auditing Chapter 1 Introduction. Definition of Auditing The accumulation and evaluation The accumulation and evaluation Of evidence about information.

9.401 Auditing Chapter 1 Introduction. Definition of Auditing The accumulation and evaluation The accumulation and evaluation Of evidence about information.
OTHER SERVICES AND REPORTS. STATEMENTS FOR CPAS PROVIDING ACCOUNTING AND AUDITING SERVICES 1939 - COMMITTEE ON AUDITING PROCEDURES –STATEMENTS ON AUDITING.

OTHER SERVICES AND REPORTS. STATEMENTS FOR CPAS PROVIDING ACCOUNTING AND AUDITING SERVICES COMMITTEE ON AUDITING PROCEDURES –STATEMENTS ON AUDITING.

Similar presentations

Ads by Google