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Other Assurance & Attestation Services By David N. Ricchiute
AUDITING CHAPTER 18 Other Assurance & Attestation Services By David N. Ricchiute
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TOPICS AICPA Special Committee on Assurance Services
Attestation services GBW 8th ed., Ch. 18
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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. 18
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ASSURANCE SERIVCES Electronic commerce Health care performance
Risk assessment Information systems reliability Business performance Elder care GBW 8th ed., Ch. 18
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ELECTRONIC COMMERCE ASSURANCES: WebTrust
CPA offers assurance in form of opinion Data integrity Does processing alter transactions? Data security Do systems preclude unauthorized disclosure? GBW 8th ed., Ch. 18
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DATA SECURITY Parties to a transaction are authentic
Transactions, documents are protected GBW 8th ed., Ch. 18
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WEBTRUST PRINCIPLES Principle The Company Business 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. 18
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ELECTRONIC COMMERCE ASSURANCES: SysTrust
CPA offers assurance in form of opinion Reliability of company’s information system Availability Security Integrity Maintainability GBW 8th ed., Ch. 18
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SYSTRUST PRINCIPLES Principle The Company’s System Availability
Available for operation per service agreements Security Protected against unauthorized physical, logical access Integrity Maintainability Complete, accurate, timely, authorized Updated as required providing for availability, security, integrity GBW 8th ed., Ch. 18
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HEALTH CARE ASSURANCES: Examples
Testing research programs (UC-SD) for False insurance claims Unjustifiable billings Illegal use embryos Benchmarking performance Quality assurance for healthcare GBW 8th ed., Ch. 18
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PAST CORE COMPETENCIES
Knowledge of accounting principles, auditing standards Facility in evaluating evidence Knowledge how to manage risk Tack in engaging, maintaining clients GBW 8th ed., Ch. 18
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ATTESTATION SERVICES Review Compilation OCBOA Other
GBW 8th ed., Ch. 18
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REVIEW ENGAGEMENT: Non-Public Companies
Complies with attestation standards Procedures Inquiries Analytical procedures Report Negative assurance Accountant “not aware of any material modifications” necessary for GAAP GBW 8th ed., Ch. 18
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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. 18
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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. 18
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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. 18
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REQUISITE KNOWLEDGE FOR COMPILATIONS
Knowledge of accounting principles, practices in industry Understanding of entity’s transactions, accounting records, & qualifications of accounting personnel GBW 8th ed., Ch. 18
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COMPILATION REPORT States explicitly that Audit not performed
Opinion not expressed GBW 8th ed., Ch. 18
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INTERIM FINANCIAL STATEMENTS: Public Companies
Reviews required by SEC for 10-Q of publicly traded companies Reviews not adequate to form opinion Report gives negative assurance GBW 8th ed., Ch. 18
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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. 18
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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 minutes Consider conformity with GAAP Obtain management’s written representation GBW 8th ed., Ch. 18
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COMPREHENSIVE BASES OF ACCOUNTING OTHER THAN GAAP
4 generally accepted comprehensive bases of accounting Cash basis Regulatory basis Tax basis Criteria having substantial support Price-level adjusted statements GBW 8th ed., Ch. 18
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SPECIFIED ELEMENTS Includes Procedures & report
Accounts or items of financial statements Nonfinancial statement assertions Procedures & report GAAS & express opinion Agreed-upon procedures & express limited assurance GBW 8th ed., Ch. 18
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AGREED-UPON PROCEDURES
Procedures are engagement specific Procedures not sufficient to express opinion Provides limited assurance GBW 8th ed., Ch. 18
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OTHER ATTEST ENGAGEMENTS
Compliance with contracts, regulations Letters for underwriters Financial forecasts, projections Personal financial statements Application of accounting principles GBW 8th ed., Ch. 18
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