Other Assurance Engagements Flashcards
CSRE 2400 Engagements to Review Historical Financial Statements
LIMITED LEVEL OF ASSURANCE
- reviews of financial statements in accordance with special purpose frameworks
- reviews of single financial statements and ** specific elements**, accounts/ items of a financial statement
CAS 800 Special Considerations — Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks
REASONABLE LEVEL OF ASSURANCE
- audit of financial statements prepared **in accordance with special purpose frameworks **
CAS 805 Special Considerations — Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement
REASONABLE LEVEL OF ASSURANCE
- audits of single financial statements and specific elements (e.g. balance sheet, income statements, net assets, profit participation or employee bonuses)
- audits of accounts/items of a financial statement such as accounts receivable, inventory, or gross sales
CAS 810 Engagements to Report on Summary Financial Statements
REASONABLE LEVEL OF ASSURANCE
Engagements to report on summary financial statements
- Engagements to report on summary financial statements*
- Reasonable level of assurance
CSAE 3001 Direct Engagements
REASONABLE OR LIMITED
Direct engagements on financial information other than financial statements
- these are audits and reviews of information **other than ** financial
statements and other historical financial information - Direct engagements… covers audits (providing reasonable assurance) and review
engagements (providing limited assurance) other than audits or reviews of financial statements
and other historical financial information such as - performance audits or environmental audits
CSAE 3000 Attestation Engagements Other than Audits or Reviews of Historical Financial
Information
REASONABLE OR LIMITED
Attestation engagements of financial information other than financial statements
- Attestation engagements other than audits or reviews of historical financial information
- An example of an engagement that may be performed under CSAE 3000 is a review of management’s statement of days of attendance for children in a child care facility.
- As part of this engagement, management prepares a report of the number of days of attendance for children in the childcare facility, which the auditor performs review procedures upon.
CSAE 3531Direct Engagements to Report on Compliance
REASONABLE OR LIMITED
Audits and reviews of compliance with agreements, statutes, and regulations
- Direct engagements to report on compliance
- meaning the practitioner forms an opinion or conclusion on
whether the entity has complied with the agreement, statute, or regulation in question
compliance with agreements, statutes, and regulations
CSAE 3530 Attestation Engagements to Report on Compliance
REASONABLE OR LIMITED
Audits and reviews of compliance with agreements, statutes, and regulations
- Attestation engagements to report compliance
- meaning the practitioner forms an opinion or conclusion on whether management’s
assessment of compliance is fairly stated
compliance with agreements, statutes, and regulations
Q: What are special purpose frameworks?
- they are financial reporting frameworks designed to meet the financial information needs of specific users that is not GAAP
- the standards for
audits and reviews of special purpose financial statements are CAS 800 Special Considerations and CSRE 2400
Q: Examples of special purpose frameworks
CAS 800 and CSRE 2400
- financial statements prepared using a cash basis of accounting
- financial statements prepared using a tax basis of accounting
- financial statements prepared based on provisions established by a regulator
- financial statements prepared in accordance with the terms of a contract
Q: What are summary financial statements?
- They are historical financial information that is derived from financial statements but that contains less detail than the financial statements, while still providing a structure representation consistent with the financial statements
- For example, the balance sheet from a set
of summary financial statements would present only the following line items: current assets, long-term assets, current liabilities, long-term liabilities, and equity.
Q: Examples of agreements, statutes, and regulations requiring compliance
- ** loan agreement ** where specific requirements include covenants or dividend restrictions
-
franchise agreement that requires the franchisee to spend a certain amount of funds in accordance
with specified policies - government funding agreement that requires the recipient to maintain certain employment levels
- **policy or law ** that requires an entity to comply with environmental matters
CSAE 3416 Reporting on Controls at a Service Organization Relevant to Users Entities’ Internal Control Over Financial Reporting
Reporting on controls at a service organization
- An entity may outsource supporting functions that are not primary functions of the entity to
a service organization (including payroll or information system operations). Although there are benefits to outsourcing these supporting functions to a service organization, there is risk involved. - To monitor this risk, an entity may obtain independent third-party assurance that controls at the
service organization are suitably designed and implemented, and are operating effectively.
Q: What are the two types of reports that can be provided?
- A Type 1 report attests to the design and implementation of the service organization’s system of controls at a specific point in time. This is often for one day (a point in time), when the auditors actually review the design and implementation of the system.
- A Type 2 report attests to the design, implementation, and ongoing operating effectiveness of the organization’s system of controls. This assurance would be provided over a period of time, such as six months or a year.
Section 7060 Auditor Review of Interim
Financial Statements
Review of interim financial statements
Interim reviews completed under Section 7060 are different than review engagements completed under CSRE 2400.
The primary purpose of interim review under Section 7060 is to allow publicly listed companies to prepare quarterly reports that contain at least a minimal set of financial statements to meet security regulatory requirements (which is mandatory for publicly listed companies).
