Attestation Engagements Flashcards
an examination, review, or agreed-upon procedures engagement performed under the attestation standards related to subject matter or an assertion that is the responsibility of another party.
Attestation Engagement
For an Attestation Engagement, the CPA provides a written conclusion about…
an assertion that is another party’s responsibility
An attestation engagement in which the practitioner obtains reasonable assurance by obtaining sufficient appropriate evidence about the measurement or evaluation of subject matter against criteria in order to be able to draw reasonable conclusions on which to base the practitioner’s opinion about whether the subject matter is in accordance with (or based on) the criteria or the assertion is fairly stated, in all material respects.
Examination Engagement
An attestation engagement in which the practitioner obtains limited assurance by obtaining sufficient appropriate review evidence about the measurement or evaluation of subject matter against criteria in order to express a conclusion about whether any material modification should be made to the subject matter in order for it be in accordance with (or based on) the criteria or to the assertion in order for it to be fairly stated.
Review Engagement
An attestation engagement in which a practitioner performs specific procedures on subject matter or an assertion and reports the findings without providing an opinion or a conclusion on it. The parties to the engagement (specified party) agree upon and are responsible for the sufficiency of the procedures for their purposes.
Agreed-Upon Procedures (AUP) Engagement
consists of any financial information about the future. The information may be presented as complete financial statements or limited to one or more elements, items, or accounts.
Prospective Financial Information
The objective of an Examination is to…
express an opinion
The objective of a Review is to…
express negative assurance (nothing came to our attention that indicates information does not materially conform to criteria)
In regards to an AUP Engagement, what are the auditor’s responsibilities in reference to an opinion & the level of assurance provided?
- No opinion is expressed
- No assurance is provided
- Lists the procedures performed and the findings from those procedures
What are the auditor’s general standards required for attestation engagements?
T - Training & Proficiency
I - Independence
P - Professional Care
What are the standards of fieldwork?
P - Planning & Supervision
I - Internal Control
E - Evidence
What are the standards of reporting?
C - Consistency
D - Disclosures
O - Opinion
G - GAAP (MUST state whether the F/S have been prepared in accordance w/ US GAAP)
What are the requirements of an AUP Engagement?
- CPA must be independent
- Responsible parties ensures procedures are adequate
- CPA & Responsible Party must agree on the procedures & criteria used
- Subject matter can consistently be reasonably measured
- CPA & Responsible Party must agree on materiality limits
- Use of the report is RESTRICTED to specific parties
What is the additional requirement for an AUP Engagement when prospective financial information is used?
The report must include a summary of significant assumptions
AUP Report:
Title Includes: __________
Identifies: __________
Conducted in accordance with: ____________
Disclaimer of Responsibility by: __________
Lists any _______ limits
Independence Subject Matter AICPA Attestation Standards CPA Materiality
What is the opinion & assurance level associated with an AUP Engagement?
- Disclaim an Opinion
- State that NO negative assurance is given
a statement that “there are no material modifications that should be made to the financial statements in order for the statements to be in conformity with the applicable financial reporting framework.”
Limited Assurance
What type of assurance is issued in relation to a review of financial statements (AR-C 90.17) and in certain reports on a review of interim financial information.
Limited Assurance
an auditor’s statement to the effect that the tested items are in compliance with applicable laws or regulations or agreement with specified standards.
Positive Assurance
When may Positive Assurance be used?
It may be used in engagements involving compliance auditing of governmental entities and recipients of governmental financial assistance, as specified in Government Auditing Standards and the Single Audit Act of 1984.
is a statement made by the auditor which says that, as a result of specified procedures, “nothing came to our attention which would indicate that specified matters do not meet a specified standard.”
Negative Assurance
When is an auditor NOT allowed to express Negative Assurance?
As a general rule, auditors cannot use negative assurance when writing an attestation opinion on financial statements
When is an auditor allowed to express Negative Assurance?
comfort letters, special reports, applying agreed-upon procedures, and certain reports on compliance with laws and regulations and with contractual agreements
Negative assurances should never be used in a(n) ______________ .
Audit Report
