Module A - Other Public Accounting Service Flashcards
assurance engagements are services that…
improve quality of information
attestation info is any info…
management is putting together
attestation engagements report on…
subject matter or assertion about subject matter
in attestation engagements, other party acknowledges responsibility for…
subject matter or assertion
examination is a…
high level of assertion
assertion based examination:
evaluate a written assertion
direct examination:
evaluate something other than written assertion
review is a ____ level of assertion
limited
for agreed-upon procedures, level of assurance depends upon…
procedures performed
three types of engagements
examination, review, agreed-up procedures
attestation standards are similar to…
fundamental auditing principles
4 attestation standards
practitioners knowledge about subject matter, suitable criteria, evaluation of internal control not required, restricted distributions
for attestation standards, what is not required?
evolution of internal control
for service organizations, who provides services related to controls to who?
service organization to user entity
service auditor provides SOC report on controls to who?
user entity auditor
service organizations are organizations that…
process transactions that are relevant to client’s internal control over financial reporting
user auditors may require…
assurance on internal controls implements at service organizations
for issuers, required report on…
operating effectiveness of internal control over financial reporting
for non issuers, requirements to…
- obtain understanding of design of internal controls
- requirement to determine operating effectiveness of internal controls (if chosen to rely on internal controls)
SOC type 1 includes
description of IC, design of IC
SOC type 2 includes
description of IC, design of IC, and operating effectiveness of IC
agreed upon procedures engagements typically would be contacted to…
do only one procedure
agreed upon procedures engagements scopes are usually…
less than an audits
in a agreed upon procedures engagements report, you…
- identify parties and describe specific procedures performed
- note an examination not performed and disclaim an opinion
- provide a summary of findings
- may limit use of report to specified parties
agreed upon procedures engagements are not an…
examination
prospective financial information (PFI) mainly focuses on…
forecasts or projections
PFI info represents…
the financial position, results of operations, and cash flows for some period of time in the future
two types of PFI
financial forecasts, financial projections
financial forecasts is a PFI based on…
expected conditions and courses of action
financial projections are based on..
the occurrence of one or more hypothetical events that change existing business structure
two types of use/ distribution of report
general use, restricted use
general use if for _____ only
financial forecasts
general use presents to…
a large number of users
restricted use presents to…
only users whom the entity is negotiating
projection is always _____ use
restricted
examination of PFI expresses opinion on…
presentation of PFI and reasonableness of assumptions
for agreed-up procedures on PFI, modify report to…
describe scope the engagement and provide a summary of findings (rather than an opinion on the presentation and reasonableness of assumptions)
examination of PFI includes
- identifies PFI examined by accountant
- enagment conducted in accordance with AICPA attestation standards
- expresses opinion on presentation of PFI and reasonableness of assumptions
- indicated that differences between PFI and actual results may occur
- if a projection, identify hypothetical assumptions and limit use of report
