3 - I: MIPPs Non Audit Services Flashcards
What does Code cover regarding non audit services?
NAS provision to non-public attest clients and public non-attest client.
Who covers NAS provision for public attest clients?
Sarbanes Oxley.
What are four audit related communications that are not NAS?
The client’s selection, application of accounting standards, FS disclosure requirements.
The appropriateness of the methods used in determining accounting and financial reporting.
Adjusting JE the member prepared or proposed.
The form/content of FS.
NAS: Is it important to evaluate the total amount of the NAS?
Yes. It could indicate the firm is taking on a lot for the attest client.
Can the firm assume management responsibilities?
No.
What are four points of general requirement 1 that NAS is ok?
Client agrees to:
Assume all management responsibilities.
Oversee the service by designating an individual (CM should assess the individual’s capability).
Evaluate the adequacy and result of the service performed.
Accept responsibility for the result of the services.
What is the general requirement 2 that NAS is ok?
MIPPs satisfy themselves that management is able to satisfy the requirement 1.
What is the general requirement 3 that NAS is ok?
MIPPS establish and document in writing:
Objective of the engagement, services, the attest client’s acceptance of its responsibilities, the member’s responsibilities, any limitations on the engagement.
What are three key points for NAS for an attest client, public company?
MIPPs should not:
Audit their own work, advocate for attest clients, serve as client’s managers.
Sarbanes-Oxley prohibits MIPPS from doing which service?
Can it provide tax service?
Any financial related service.
Bookkeeping, system design, appraisal/valuations service, actuarial services, internal audit outsourcing service.
Management / HR functions.
Broker/dealer, investment adviser, investment banking services.
Legal services/expert services unrelated to the audit.
Yes.
PCAOB: independence is impaired in tax area if what (3)?
The firm enters into a contingent fee arrangement.
The firm provides marketing, planning, or opinion services or takes aggressive interpretation of tax laws.
The firm provides tax services to members of management who has a financial-reporting oversight role for a client or their immediate family)
Who selects, evaluates and compensates auditor under SOX?
Independent audit committee.
What must a client do to arrange for NAS?
Audit committee must pre-approve NAS.
