5 Types of Assurance Services LO# 2Types of Assurance ServicesRisk AssessmentInformation System ReliabilityBusiness Performance MeasurementElectronic CommercePrimePlusHealthcare Performance Measurement
6 Attest EngagementsLO# 3Attest services occur when a practitioner is engaged to issue or does issue a report on subject matter, or an assertion about subject matter, that is the responsibility of another party.
10 General Standards Adequate Technical Training & Proficiency LO# 5General StandardsAdequate Technical Training & ProficiencyAdequate Knowledge of Subject MatterSubject Matter Capable of EvaluationIndependenceDue Professional Care
11 Standards of Fieldwork LO# 5Standards of FieldworkAdequate Planning & Supervised AssistantsObtain Sufficient Evidence
12 Standards of Reporting LO# 5Standards of ReportingIdentify Subject Matter or AssertionState ConclusionState Significant ReservationsRestricted Use of Report in Certain Circumstances
13 Reporting on an Entity’s Internal Control over Financial Reporting The Federal Deposit Insurance Corporation Act of 1991 requires that the management of large financial institutions issue a report on the effectiveness of the institution’s internal control and that they engage accountants to attest to management’s report.The Sarbanes-Oxley Act of 2002 imposed similar requirements on all publicly held companies.
14 Conducting an Engagement LO# 6Conducting an EngagementNecessary ConditionsManagement of the entity accepts responsibility for the effectiveness of the entity’s internal control.The responsible party evaluates the effectiveness of the entity’s internal control using suitable criteria (referred to as control criteria).Sufficient competent evidence exists or could be developed to support the responsible party’s evaluation.Management provides to the practitioner its written assertion based on control criteria referred to in its report.
15 Financial Forecasts and Projections LO# 7Financial Forecasts and ProjectionsAuditors have been asked to provide assurance with respect to prospective financial statements. The practitioner can examine, apply agreed-upon procedures, or compile the prospective financial statements if such statements are expected to be used by a third party.
20 Accounting and Review Services LO# 8Accounting and Review ServicesMany nonpublic businesses do not need an audit of their financial statements. However, these entities may employ a CPA to assist with preparing their financial statements, tax returns, or other financial documents.CompilationsReviews
22 Compilation of Financial Statements LO# 8Compilation of Financial StatementsA compilation is defined as presenting, in the form of financial statements, information that is the representation of management or owners without expressing any assurance on the statements.Compilation with Full DisclosureCompilation that Omits DisclosuresCompilation when CPA is not Independent
25 Review of Financial Statements LO# 8Review of Financial StatementsA review is defined as the performance of inquiry and analytical procedures to provide the accountant with a reasonable basis for expressing limited assurance that no material modifications should be made to the statements in order for them to conform to GAAP (or other comprehensive basis of accounting).
26 Review of Financial Statements LO# 8A Review InvolvesObtain knowledge of the accounting principles and practices of the industry and an understanding of the entity’s business.Obtain a general understanding of the entity’s organization, its operating characteristics, and the nature of its assets, liabilities, revenues and expenses.Ask the entity’s personnel questions.Perform analytical procedures.Read the financial statements to determine if they conform to GAAP.Obtain reports from other accountants, if any.Obtain a representation letter from management.
28 Going-Concern Uncertainty LO# 8Conditions That May Result in Modification of a Compilation or Review ReportDeparture from GAAPGoing-Concern Uncertainty
29 Review with GAAP Departure LO# 8Review with GAAP Departure
30 Internal AuditingLO# 9Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations.It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
31 Institute of Internal Auditors (IIA) Standards LO# 9Institute of Internal Auditors (IIA) StandardsThe IIA oversees and sets standards for internal auditing internationally.Standards and EthicsPractice AdvisoriesPractice Aids
32 IIA Code of Ethics Principles Integrity Objectivity Confidentiality LO# 9IIA Code of EthicsPrinciplesIntegrityObjectivityConfidentialityCompetency
35 Interactions between Internal and External Auditors LO# 9Interactions between Internal and External AuditorsBefore relying on the work of internal auditors, the external auditor must evaluate the internal auditors’ objectivity and competence.Some of the work performed by internal auditors is directly relevant to the work of the independent auditor.
36 Five Principles of Trust Services LO# 10SecurityFive Principles of Trust ServicesAvailabilityProcessing IntegrityOnline PrivacyConfidentiality
37 relating to Electronic Commerce LO# 11WebTrust ServicesCPA WebTrustAssurance Servicesrelating to Electronic Commerce
38 relating to Information Systems LO# 12SysTrust ServicesSysTrustAssurance Servicesrelating to Information Systems