A5/M3 Attestation Engagement and Standards

Question 1

what is attestation engagement and its purposes?

Answer 1

• attest engagements are defined as auditor is engaged in EXAMINATION, REVIEW, or AGREED-UPON PROCEDURES reports on subject matter or assertion about the subject matter, which is the responsibility of party other than auditor (usually management)
• Purposes:
  + examination: provide opinion or positive assurance
  + review: provide conclusion (or negative assurance or limited assurance)
  + agreed-upon procedures: provide results in findings (or no assurance)

Question 2

what are scope restrictions?

Answer 2

• examination: may result in a qualified, disclaimer, or withdraw
• review: withdraw

Question 3

what are the 3 types of examination and review engagements?

Answer 3

1. Assertion-based examination engagement (2 types on subject matter and assertions): provides positive opinion or high level of assurance about whether the underlying subject matter is in accordance with (or based on) the criteria or the responsible party’s assertion
2. Direct examination engagement: need to obtain understanding the purpose of the engagement, ask how the report will be used, why client needs this kind of report? before accepting the engagement because the client (responsible party) does not provide an assertion
3. Review (2 types subject matter and assertions): a review results in conclusion

Question 4

what are the 6 subject matters that the auditor follows SSAE standards?

Answer 4

1. Agreed-upon procedures
2. Financial forecasts and projections
3. Pro forma financial statements
4. Compliance
5. Management’s discussion and analysis (MD&A)
6. Reporting on controls at service organization