A6 Reporting On Compliance

Question 1

Reporting on Compliance Key Factors

Answer 1

Hey factors to be considered by the auditor includes understanding of compliance requirements, scope of the audit, materiality, audit procedures, reporting on non compliance, auditor’s report, legal & ethical requirements, documentation, communication with 3rd parties, independence, & objectivity.

Question 2

Issuing A Report on Compliance

Answer 2

In order for an auditor to issue a report on a client’s compliance in connection with a financial statement audit, the auditor must have audited the client’s financials and expressed an unmodified or qualified opinion. Therefore, the auditor may only issue negative assurance on compliance in this situation

Question 3

Negative Assurance

Answer 3

A statement whereas the auditor found no evidence that the entity failed to comply with their contractual agreements or regulatory requirements

Question 4

Compliance Audit Procedures

Answer 4

An auditor conducting a compliance audit will design & perform additional audit procedures (test of controls) in response to the assessed risk of material noncompliance.

Question 5

Compliance Reporting

Answer 5

Providing reasonable assurance of the detection of MM resulting from noncompliance with contracts , regulatory requirements, laws, & ICFR

Question 6

Attestation Standards for Compliance

Answer 6

For compliance attestation, two types of engagements are compliance with specified requirements which covers an entity’s compliance with requirements of laws & other regulations, and also Internal control over compliance which covers an entity’s internal control over compliance with specified requirements.

Examinations & AUP are done on compliance NOT reviews.