A2 (Becker) Other Report

Question 1

OCBOA

Answer 1

Other Comprehensive Basis of Accounting

Question 2

How does the STAFF get understanding of client’s business?

Answer 2

STAFF qualifications
TRANSACTION types/frequency
ACCT basis used to prepare f/s
FORM of accounting records
FINANCIAL statements form and content

Question 3

Format of Compilation: CAR of MR ARSOM

Answer 3

State f/s have been COMPILED and they have not been AUDITED or REVIEWED in intro.

MANAGEMENT’S RESPONSIBILITY before
ACCOUNTANT’S RESPONSIBILITY that statements were compiled in accordance w/ SSARS issued by aicpa. State OBJECTIVE is to assist MANAGEMENT

Question 4

Review Requirements : U LIAR CPA

Answer 4

UNDERSTANDING w/ client

LEARN or about client’s business
INQUIRIES addressed to appropriate individuals
ANALYTICAL PROCEDURES should be performed
REVIEW

CLIENT rep letter needed
PROFESSIONAL judgment used to evaluate results
ACCT communicates results

Question 5

Format for Review Report: AM I SAD MR FIRSALA

Answer 5

Intro paragraph states a review includes applying ANALYTICAL procedures to MANAGEMENT’S financial data and make INQUIRIES into company management. Review is SUBSTANTIALLY less in scope than an AUDIT and DOES not express an opinion.

MANAGEMENT’S RESPONSIBILITY paragraph states they are responsible for fair presentation of FINANCIAL statements and INTERNAL control.

Auditor’s RESPONSIBILITY is to conduct in accordance with SSARS issued by aicpa and they provide LIMITED ASSURANCE that no material modifications are needed to f/s.

Question 6

Predecessor account’s compilation or review reissued unchanged, OLD CPA should:

Answer 6

1) Read statements & report on current period
2) Compare prior stmts w/ current
3) Letter from successor that they are not aware of any relevant info the may effect prior period statements.

Question 7

Predecessor account’s compilation or review not reissued, NEW CPA should:

Answer 7

1) make reference to predecessor’s work
- OR-
2) Perform level of service themselves

Question 8

Comparative report where one period is audited, CPA should:

Answer 8

1) Reissue prior period report
- OR-
2) Include add’l paragraph in current describing responsibility assumed for prior period statements.

Question 9

Comparative w/ Downgrade in service

Answer 9

CPA should state:

1) Prior period audited
2) Date on previous report
3) Opinion expressed or reason for modification
4) No audit work done since report date.

Question 10

Comparative w/ Upgrade in service

Answer 10

CPA Should:

1) Type of service performed
2) Date on report
3) Material modifications on report
4) Statement service was less in scope and did not provide a basis for opinion

Question 11

How auditors communicate problems

Answer 11

• Report to Management, then
• Board of Directors/Audit Committee then
• Withdraw & get legal advice

Question 12

Attestation standards (TIPPY-PASSER)

Answer 12

General:

• TRAINING & proficiency
• INDEPENDENCE
• PERFORMANCE (Due care in planning)
• PROFESSIONAL knowledge of subject matter
• YOUR belief subj. matter capable of evaluation

Fieldwork:

• PLANNING & supervision
• APPROPRIATE evidence to provide basis for conclusion

Reporting:

• SUBJECT matter identified
• SIGNIFICANT reservations disclosed
• EXPRESS conclusions
• RESTRICT use of report

Question 13

I-AM-SURE you can perform agreed upon proceedures

Answer 13

• INDEPENDENCE of practitioner
• AGREEMENT of parties
• MEASURABILITY & consistency of subject matters
• SUFFICIENCY of procedures
• USE of report restricted
• RESPONSIBILITY for subject matter (client)
• ENGAGEMENTS to perform work on prospective financial statements