Attestation Engagements

Question 1

Attestation Engagement

Answer 1

CPA provides a written conclusion about an assertion that is another party’s responsbility (called the responsible party)

Must following Attestation Standards

Examples:
Examination - Similar to an audit; objective is to express an opinion -unmodified, qualified, adverse; can be on prospective financial information; could be on management’s assertions

Review - objective is to express negative assurance (nothing came to our attention that indicates information does not materially conform to criteria)

Agreed-upn procedures - no opinion is expressed; no assurance is provided; present findings from procedures performed

Question 2

Attestation Engagement: General Standards

Answer 2

5 General Standards:

1) Training and proficiency - Practitioner must have adequate training and proficiency in the attestation function
2) Knowledge - Practitioner must have knowledge of subject matter. Could consult a specialist.
3) Criteria exists to evaluate the assertion - Practitioner can only perform an attestation engagement on an assertion capable of being evaluated against suitable criteria that’s available to users.
4) Independence - Required for examination, review, and agreed-upon procedures since providing assurance.
5) Due professional care - Practitioner must practice due professional care in planning and performing any attestation engagement.

Question 3

Attestation Engagement: Fieldwork Standards

Answer 3

2 Fieldwork Standards:

1) Planning and supervision
2) Sufficient evidence obtained - CPA is not required to obtain an understanding of internal control

Question 4

Attestation Engagement: Reporting Standards

Answer 4

4 Reporting Standards:
1) Identify the assertion or subject matter
2) State the conclusion -
Examination - Opinion
Review - Negative Assurance
Agreed-upon procedures - Findings
3) List any reservations
4) List any restrictions

Question 5

Agreed Upon Procedures Engagement

Answer 5

CPA is engaged to issue a report on findings based on specific procedures performed on subject matter

Requirements:

• CPA must be independent
• Responsible party ensures procedures are adequates
• CPA and Responsible party must agreed on the procedures and criteria used
• Subject matter can be reasonably measured
• CPA and Responsible Party agree on materiality limits
• Use of report is restricted to specific parties
• If the procedures are performed on prospective information, then the report must include a summary of significant assumptions