Other Engagements, Reports, and Accounting Services Flashcards
Does a client have to comply with GAAP for other engagements?
No
What are the 4 areas of special considerations?
Special purpose frameworks, Single financial statements and specific elements, compliance, and summary financial statements
What are the 4 bases of other comprehensive bases of accounting?
Cash, tax, regulatory, and contractual
What are the additional requirements for the auditor when auditing special purpose framework?
Obtain an understanding of the purpose, intended users, and steps taken by management, obtain the agreement of management, and obtain an understanding of any significant interpretations
What are the differences between the standard auditor’s report and a report on special purpose financial statements?
Describe the purpose of the financial statements, Non-GAAP Titles, management responsibility paragraph, emphasis-of-matter paragraph, other-matter paragraph, regulatory basis financial statements intended for general use, and auditor’s report prescribed by law or regulation
What should the management responsibility paragraph in a special purpose report give reference to?
Responsibility for determining that the applicable financial reporting framework is acceptable in the circumstances
What types of basis of accounting should have restricted use?
Contractual or regulatory
Should an auditor include an emphasis-of-matter or other-matter paragraph for special purpose financial statements prepared in accordance with a regulatory basis and intended for general use?
No
What should the auditor express an opinion about dealing with regulatory basis financial statemens intended for general use?
Fairly presented, in all material respects, in accordance with GAAP and prepared in accordance with the special purpose framework
Special purpose financial statements should include the following elements?
Introductory, description of the responsibility of management, reference to management’s responsibility for determining that the applicable financial reporting framework is acceptable in the circumstances, description of the purpose for which the financial statements, description of the auditor’s responsibility, opinion paragraph, empasis-of-matter, and other-matter paragraph
Is a complete set of financial statements prepared in accordance with the cash basis of accounting restricted use?
No
What type of use is a complete set of financial statements prepared in accordance with a regulatory basis of accounting?
General
How can an audit of a single financial statement or of specific elements, accounts, or items of a financial statement be performed?
Separate engagement or in conjunction with an audit of an entity’s complete set of financial statements
What are examples of specific elements, accounts, or items of a financial statement?
Accounts receivable, allowance for doubtful accounts receivable, inventory, or the recorded value of intangible assets, schedule of disbursements regarding a lease property, and schedule of profit participation or employee bonuses
What should an auditor obtain an understanding of when auditing a single financial statement or a specific element of a financial statement?
Purpose, intended users, and the steps taken by management to determine that the applicable financial reporting framework is acceptable
When auditing a single financial statement, how should the auditor determine materiality of a single financial statement?
Determine for the single financial statement
What should the auditor whe reporting on a complete set of financial staements and a single financial staement or a specific element of those financial statements?
Issue a separate auditor’s report and separate opinions and indicate in the report on a specific element the date of the auditor’s report on the complete set of financial statements and the nature of the opinion expressed
What should the auditor do if the auditor’s modified opinion on the complete set of financial statements is relevant to the audit of a specific element of the financial statements?
Express an adverse opinion and disclaimer of opinion
How should an auditor report on an incomplete presentation that is otherwise in accordance with GAAP?
Emphasis-of-matter paragraph that states the purpose for which the presentation is prepared and indicates that the presentation is not intended to be a complete presentation
What type of assurance can auditor issue on compliance?
Negative
Is the auditor required to have audited financial statements when issuing negative assurance?
Yes
What paragraph should the report on compliance be included in the Auditor’s Report?
Other-matter paragraph
Should the auditor accept the engagement to report on summary financial statements if it isn’t engaged to audit the financial statements?
No
What opinions can an auditor issue on summary financial statements?
Unmodified or adverse
Should the auditor withdraw from the engagement on audited financial statements containing adverse or a disclaimer of opinion in order to report on the summary financial statements?
Yes
Is the auditor’s report on the summary financial statements dated later than the date of the auditor’s report on the audited financial statements?
Yes
