Assurance - Other Engagement Flashcards
What are the other audit and review engagement
- Special reports and engagement within the section provide either reasonable assurance or limited assurance
- Reasonable assurance = positive assurance
- Limited assurance is provided more for review
What other engagement is provided reasonable or limited assurance
- Audit and review of special purpose F/S
- Audit and review of single F/S and specific elements of a F/S
- Engagement to report on summary F/S
- Direct engagement on financial information other than F/S
- Attestation engagement of financial other than F/S
- Review of interim F/S
Explain the special purpose framework
Special purpose framework - Financial reporting framework designed to meet the financial information needs of the specific user
CAS 800 - Special COnsideration - Audit of F/S Prepared in accordance with Special purpose
CRSE 2400 - Engagement to Review Historical F/S - Limited assurance
What is to be included in the planning and reporting consideration
- It is to obtain an understanding of the purposes of the F/S
- Obtain an understanding of the intended users
- Obtain an understanding of management decision to adopt the applicable financial framework
Reporting consideration
- Intended for a particular group of users, the practitioner should describe the purpose of the F/S and list intended user in the report
- Emphasis of matter paragraph is included
What is the audit and review of single F/S and specific F/S
- Client can request an audit or review of a specific account or element of an F/S such as A/R, inventory, gross sales
- CAS 800 - Special consideration - reasonable or CRSE 2400
Ex. Specific balance sheet or income statement account
Schedule of net asset
Planning consideration
- Practitioner should consider whether the audit or review of a specific element or single F/S is practical
Reporting consideration - Practitioner has express an adverse opinion or disclaimer of opinion on complete set of F/S
What CAS is used for engagement of summary financial statement, planning, and reporting consideration
CAS 810 - guides reporting on summary F/S
- Historical financial information that is derived from F/S but that contains less detail than the F/S
Planning consideration - Accept an engagement to report on a summary financial statement only
Reporting consideration - Practitioners determine whether they are satisfied that the summary F/S is consistent with audited F/S
What is a direct engagement on financial information other than F/S
CSAE 3001 - Direct Engagement cover audit or review of F/S
- Direct reporting engagement, unlike an audit or review of F/S, practitioners are required to develop suitable criteria to provide a conclusion on the subject matter
Performance audit - Assurance engagement that evaluates whether public sector entities are delivering programs or carrying out activities and processes with due regard to one or more following CSAE 3001
Economy - Economy involves getting the right input
Efficiency - Efficiency involves getting the most from available resources
Effectiveness - Effectiveness involves meeting the objective set and achieving the intended result
Environment and sustainable development - Environment and sustainable development encompasses sustainable development strategies
Explain what attestation engagement of financial information other than F/S
CSAE 3000 - Other than audit or review of F/S and other historical financial information
Reasonable assurance (for an audit) or limited assurance (for a review)
CSAE 3530 - Attestation Engagement to Report on Compliance
CSAE 3531 - Direct engagement to report on compliance
Ex. Loan agreement - Franchise agreement that required
- Government funding agreement that requires the recipient to maintain a certain employment level
Planning - Practitioner will express an opinion or conclusion as to whether management statement of entity compliance the specific requirement
What is needed for reporting for service organization
Reporting - CSAE 3416 - reporting on controls at services organization relevant to user entities’ internal control over financial reporting
Type 1 report - Attests to the design and implementation of the service organization system of controls at a specific point in time
Type 2 report - Attest to the design, implementation, and ongoing operating effectiveness of the organization’s system of control
What standard is used or review of interim F/S
CRSE 7060 - is to allow publicly listed companies to prepare quarterly reports that contain at least a minimal set of F/S
- Should be prepared using the accounting policies of the latest published annual F/S or using new policies if these are expected
IAS 34 - timeless, less extensive
Forensic audit - may be used to evidence in cost of the law, ranging in investigation or embezzlement, proper forensic is required
support SAAE
What is the other engagement that provides no assurance
CRSR 4400 - agreed-upon procedure engagement.
- Requirement professional judgment when accepting, conducting, and reporting on agreed-upon procedures engagement
Reporting application of accounting principles
1. The application of accounting principles to a specific transaction
2. Type of opinion that may be rendered on the entity F/S
Section 7600 - guide the type of engagement
Section 7150 - Auditor involves consent to use of Report of Auditor included in offering document provide guidance on consent to use audit report in offering document
What is the auditor’s involvement with the designated document?
- Designated document - 7170 guide consenting to the use of an auditor report in connection with the designated document
Assistance to underwriter - Will wish to limit their liability and will often ask that the auditor provide them with comfort as it’s usually not practical for the underwriter to carry out an investigation
1. Offering made under the offering document as a prospectus
2. Another securities transaction covered by securities legislation
3. Section 7200
Consideration of recommending engagement
- Subject matter of the report
- Desired level of assurance
- Time constraint
- Cost to the client
