Other Reports Flashcards
Distinguish between the types of prospective financial statements. Is their use restricted?
A forecast is presents what management expects to occur based on expected conditions and courses of action. Their use is general or limited.
A projection presents hypothetical assumptions and “what if” scenarios. Their use is solely limited.
What types of engagements may an accountant undertake in connection with prospective financial statements?
Audits
Compilations
Agreed-upon procedures
***No Reviews!!!
What must all reports of prospective financial statements contain?
Results may not be achieved
No responsibility to update
Limitations on usefulness (for projections)
How does supplementary information supplied voluntarily by the client (in addition to the audited financial statements) affect the fieldwork and reporting required of auditors?
Auditor needs to read the supplementary information for consistency and report any exceptions noted.
How does supplementary information required by FASB or GASB (in addition to the audited financial statements) affect the fieldwork and reporting required of auditors?
Auditor needs to perform limited review procedures on the supplementary information and report any exceptions
How does supplementary information included in an auditor-supplied document impact the fieldwork and reporting required of auditors?
Auditor is required to audit the supplementary information (unless disclaiming opinion) and report all cases.
When auditing financial statements intended to conform to an other comprehensive basis of accounting, what auditing standards will an auditor conform to?
Still the same Generally Accepted Auditing Standards (GAAS)
What is the threshold for auditors being required to report on segment information? What segment types require reporting?
> 10% in different industries, foreign operations, export sales, or major customers.
When reporting presenting a report conforming to an other comprehensive basis of accounting, can the same GAAP financial statement names be used?
No! Statement of Financial Position, Statement of Revenue (or Activity) are types of names that should be used depending on the OCBOA used.
Are reviews of financial forecasts permitted?
No! Reviews of prospective financial statements are not permitted!
Are reviews of financial projections permitted?
No! Reviews of prospective financial statements are not permitted!
Can an auditor express an opinion on specified elements or accounts in conjunction with a report containing an audited opinion?
Only if the opinion is unqualified or qualified. Including a separate opinion in a report containing an adverse or disclaimer of opinion would be misleading (known as a “piecemeal” opinion)
What must an accountant do if solicited by a client of another CPA firm to give an opinion on the application of GAAP to a specific transaction?
The accountant must consult with the other CPA for on the transaction in question.
Are there any restrictions on the use and distribution of agreed-upon procedures reports?
Yes! The distribution of agreed-upon procedures reports are inherently limited as the client is telling us what to do.
What are attestation engagements? What are the attestation engagement types/categories?
Attestation engagements are engagements where an accountant expresses a written conclusion about a client’s written assertions. Accountants are required to be independent. The three categories of attest engagements are:
Examinations (Audits)
Reviews
Agreed-upon procedures
**no compilations (as conclusion is being formed) and no special reports
