A2 (7) - ATTEST ENGAGEMENTS

Question 1

I. MAIN CHARACTERSTICS - Trust services (related to IT)

Answer 1

1- Web Trust Engagements - e-commerce

2- Sys Trust Engagements - defined electronic system

Question 2

I. MAIN CHARACTERSTICS - Statements on Standards for Attestation Engagements (SSAE)

Answer 2

1- Agreed-upon procedures
2- Financial forecasts and projections
3- Pro forma financial statements
4- Internal control over financial reporting
5- Compliance for specific engagement
6-Management’s Discussion and Analysis (MDA)

Question 3

SSAE NOT APPLY

Answer 3

1- Audits.
2- Compilations and reviews of the FSs
3- Return preparation (income tax, franchise, other).
4- Advocating for the client (litigation services).
5- Providing consulting/advisory services
6- Operational audits by internal auditors

Question 4

ATTESTATION STANDARDS CHARACTERSTICS

Answer 4

1- Issued by senior technical bodies of the AICPA
2- No reference is made to financial statements
3-No reference is made to GAAP
4- provide levels of assurance less than GAAS
5- limited use report is provided
6-Departures from mandatory requirements must be justified

Question 5

ATTESTATION STANDARDS - Five general standards

Answer 5

1- Training and proficiency
2- Independence.
3-Due professional care in planning and performance
4-Professional, adequate knowledge of subject matter
5- Your belief that the subject matter is capable of evaluation against criteria that are suitable and available to users.

Question 6

ATTESTATION STANDARDS - Two fieldwork standards

Answer 6

1- Planning and supervision

2- Appropriate, sufficient evidence to provide a reasonable basis for the conclusion

Question 7

ATTESTATION STANDARDS - Four reporting standards

Answer 7

1- Identify the Subject matter or the assertion being reported

2-Disclose ~significant reservations about the engagement

3-Express conclusions about the subject matter or the assertion relation to the established or stated criteria

4- Restrict use of the report to specified parties.

Question 8

SCOPE LIMITATION

Answer 8

1- Examination :- - qualified , disclaimer ,OR withdrawal

2- Review :- withdrawal

Question 9

LACK OF ADEQUACY OF DISCLOSURE OR CONFIRMITY WITH CRITERIA

Answer 9

1- Examination :- - qualified or adverse opinion

2- Review :- modified conclusion

Question 10

II. AGREED-UPON PROCEDURES ENGAGEMENTS

Answer 10

1- Independence of the Practitioner
2- Agreement of the Parties
3- Measurability and Consistency
4- Sufficiency of the Procedures
5-Use of the Report is Restricted to the Specified Parties
6- Client is Responsible for the Subject Matter

Question 11

II. AGREED-UPON PROCEDURES ENGAGEMENTS - Reporting

Answer 11

see the report

Question 12

III. PROSPECTIVE FINANCIAL STATMENTS - FINANCIAL FORECASTS vs PROJECTIONS

Answer 12

Financial Forecast :- the expected financial results of a future period based on expected conditions

Financial Projection :- A projection reflects the financial position and results of operations based on a “what if,”type of scenario (hypothetical assumptions.)

Question 13

Typed of engagement of Prospective Financial Statements

Answer 13

1- Compilation engagement
2- Examination engagement
3- Agreed-upon procedures engagement

Question 14

Prospective Financial Statement Summary

Answer 14

See the important table

Question 15

IV. PRO FORMA FINANCIAL STATEMENTS

Answer 15

Show what the significant effects on the historical

financial information might have been had the transaction [or event] occurred at an earlier date

Question 16

PRO FORMA FINANCIAL STATEMENTS - main characteristics

Answer 16

1- Pro forma FSs may be examined or reviewed

2- Obtain an understanding of the event

3-Evaluate the pro forma adjustments, including any assumptions

4- A practitioner’s report should make reference to the financial statements from which the historical financial information is derived, and state whether such financial statements were audited or reviewed.

Question 17

V. REPORTING ON AN ENTITY’S CONTROL OVER FINANCIAL REPORTING

Answer 17

Auditing & Attestation 5.

Question 18

VI.COMPLIANCE ATIESTATIONS

Answer 18

The practitioner will generally perform an agreed-upon procedures engagement, but may perform an examination.

Question 19

VII. MANAGEMENT’S DISCUSSION AND ANALYSIS

Answer 19

REPORT that management of a public company issues with audited financial statements.

The requirements for MD&A are established by the SEC

Question 20

VII. MANAGEMENT’S DISCUSSION AND ANALYSIS - Auditor responsibilities

Answer 20

MUST obtain an understanding of these requirements before undertaking an examination or review of the MD&A.