SU 12 Other Services

Question 1

SAS

Answer 1

AICPA Statement of Auditing standards

Question 2

AS

Answer 2

PCAOB: Auditing Standards

Question 3

SSAE

Answer 3

Statement of standards on attestation engagements

cover examinations, reviews, and agreed upon procedures

Question 4

Review

Answer 4

an attestation function
Negative (limited) assurance
assures: “no visible material misstatements” - not positive confirmation fairly stated

Question 5

AUP

Answer 5

Agreed upon procedures

an attestation service that does not provide assurance

report called findings

Question 6

SSARS

Answer 6

Statement of standards of accounting and review services

cover compilations

Question 7

Compilations

Answer 7

formatting preparation of financials - no assurance offered (aka write ups)
external focus

no report - just a letter

no analysis, no assurance

independence is NOT required

if material misstatements suspected must request additional information and withdraw if refused

“See accountants complication report”

Report states that not auditing or expressing opinion

Question 8

Preparation

Answer 8

lowest level of attestation report, internal use only (though can get CPA to sign a note saying it can go to one other user)

no report issued attestation provided.

Independence not required

if material misstatements suspected must request additional information and withdraw if refused

Question 9

Assurance evolving areas

Answer 9

Risk advisory
SysTrust (checking IT systems)
WebTrust (checking websites)

Question 10

Format for compilations

Answer 10

• Title
• date completed
• each page indicates “See accountant’s compilation report” (No report required if only client will see it and engagement letter restricts use)
• since no procedures described best not to perform any

Question 11

Modifications to compilation format if disclosures are lacking

Answer 11

omissions must be disclosed

explanatory paragraphs included after other paragraphs

Question 12

Modifications to compilation format if practitioner lacks independence

Answer 12

• reasons for independence MAY be disclosed
• explanatory paragraphs included after other paragraphs
• independence is assumed if not explained

Question 13

reviews

Answer 13

• inquiries, analytical procedures, and management representation required
• no audit procedures or IC assessment required
• Auditor must be independent (if not can only do a compilation)

report states not expressing an opinion

Question 14

Review required format

Answer 14

• title
• date completed review procedures
• paragraph on any modification due to material gaap departures

Question 15

Comfort letter purpose

Answer 15

to support SEC registrations for stock offerings

Question 16

Comfort letter

Answer 16

Only expresses opinion on whether the form of the statements is GAAP compliant (not the content)

Limited usage stated in last paragraph - “solely for information of addressees and to assist underwriters”

should be dated on or shortly before effective date of registration statement

Question 17

Requirements for agreed upon procedures

Answer 17

Independence

use of report restricted to specified parties

Question 18

Items generally included in engagement letters

Answer 18

1. Nature & limitation of services performed
2. Report to be provided
3. Disclaimer re errors, fraud, or illegal acts
4. Fraud, illegal acts, or material errors will be reported to management or board

Question 19

What attestation services require written assertions from the responsible party

Answer 19

• audits
• examination
• reviews

NOT AUPS

Question 20

Which attestation services result in reports

Answer 20

Audits
Examinations
Reviews
Compilations

Question 21

Do any assurance services not require an engagement letter

Answer 21

preparations only

Question 22

When may CPAs be associated with unaudited financials

Answer 22

• if reviewed or compiled the financials and it is specified which service was performed
  or
• if it is clearly indicated that CPA performed no services/ assumes no responsibility (disclaimer of opinion)

Question 23

What is submission of financials

Answer 23

presenting prepared financials to client or third party