SSARS Flashcards
Which is NOT TRUE about review report of interim Fin info for public company
It’s similar to audit report in that both provide opinion whether FS are in conformity with GAAP
Personal financial plan containing Personal unaudited statement NOT required to follow SSARS
Also SSARS don't apply to Personal FS for pension To submit for taxing Litigation services involve potential legal or reg procedures Valuation services
SSARS
No Accountant letterhead required
No MANUAL SIGNATURE required
Under SEC rules
Lead and concurring partner must rotate every 5 years
Other partners 2 yesrs
Other audit team rotate every 7 years
Small firms with less than 5 people are exempt
Review and compilation engagements not require to perfect procedures to detect
MM due to fraud or non-compliance
Review of interim FS of Public company (PSAOB) and review of a nonissuer FS (SSARS)
Evaluation of Internal control - required for issuer only
Communication with predecessor auditor-required for issuer only
Both doesn’t require external inquires from attorney
Review of interim financial info presented in registration statement. Prospectus should include statement
Accountant’s review report is not a part of registration statement 1933
PCAOB standards approved by Sec
Standard compilation report impiles
All disclosures required by GAAP are included in the report
Report prepared in accordance with Section 404 of Sarbanes Oxley Act of 2002
Attest and report on the internal Control assessment made by the management of the issuer
Accountant make implicitly representation when issuing compilation report
Accountant independent with respect to theventity
All the disclosures required by GAAP can be omitted in
Çompilation
Sarbanes Oxley Act of 2002 requires communication when auditor providing tax services to issuer
- Communicate in writing the proposed tax services and related fees
- Auditor must discuss with committee potential effect of proposed tax services on firms independents
CONTINGENT FEE FORBIDDEN
3 situations auditor can provide issuer non audit service without impairing independence and obtaining pre-approval of audit committee. Regulation S-X
Services approved by committee PRIOR to completion of the audit
LESS that 5 % revenue
Services not recognized as non audit services at the time of engagement
Providing factual accounts in testimony explaining position taking during performance
Non audit service which impaires independence
Perform financial info systems design and implementation
Independence is not impaired if
CFO was employed by accounting firm greater than one year before the audit
Letters of underwriter give negative assurance on
A audited interim financial statements
Typical comfort letter covers
An opinion as whether auditor FS comply in form with Accounting requirements by SEC
Negative assurance unaudited condensed fin info compiles in form with requirements of SEC
Typically give negative assurance on unaudited interim financial information
Review of interim financial info is required before a comfort letter may be used
Accountant is unable to indicate on each page “No assurance is provided”, then the auditor should:
Issue a disclaimer OR
Perform a compilation report
Accountant is unable to indicate on each page “No assurance is provided”, then the auditor should:
Issue a disclaimer OR
Perform a compilation report
Review of interim FS. Auditor becomes aware of significant changes in Conte activities at one Branch location. Which can auditor perform in response to this situation
Making additional inquiry
Drafting FS notes for the client
Is not a part of compilation
Not a compilation
Reproducing client prepared FS without modification
Prepare standard monthly JE (bookkeeping service)
An accountant compiles unaudited FS that are not expected to be used by 3 Rd party. Accountant may decline to issue a compilation report provided
- Each page restrict use NO
- Writtren engagement letter is used to document understanding with client NO
- Writtren rep letter is obtained from client’s management NO
Controller of small utility company has interviewed audit firm proposing to perform annual audit of employee benefits plan. According to DOL auditor must be
Independent for purpose of examinig FS required to be filed annually with DOL
Safeguards to threats to independence identified by Generally Accepted Government Auditing Standards are generally not effective to mitigate
Management partisipaltion threat
Which is true about AICPA code of prof condact
It applies to compilation and reviews
Which is true regarding an accountant consideration of fraud with laws and regulations in compilation and review engagements
Accountant is NOT required to perform procedures designed to detect MM due to fraud
Which is correct conserning çompilation of specific alements, accounts, items of financial statement?
Compilation can not be relied upon to disclose errors, grad illigal acts
An accountants çompilation report should
The report should state that the accountant does not express an opinion on the financial statements.
