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AUD 5.03 - Attestation

  1. What is an attestation engagement?
    Assurance on subject matters other than basic financial statements that is the responsibility of another party (usually management).
  2. What are the 3 types of attestation engagements?
    • Examination
    • Review
    • Compilation
    • Agreed-Upon Procedures
  3. What subject matters are included in an attestation engagement? Which ones can receive an (1) examination, (2) a review, or (3) agreed upon procedures.
    • agreed-upon procedures (3)
    • financial forecasts and projections (1), (3)
    • pro forma financial statements (1), (2)
    • compliance (1), (3)
    • MD&A (1), (2)
    • reporting on controls at a service organization (1)
  4. True / False: Compilations are covered under SSAEs.
    • False
    • Compilations are now covered under SSARS.
  5. Which standards apply to audit engagements?
    SAS: Statements on Auditing Standards
  6. Which standards apply to preparation, compilation, and review engagements
    SSARS: Statements on Standards for Accting and Review Services
  7. Which standards apply to attestation engagements?
    SSAE: Statements on Standards for Attestation Engagements
  8. What is the purpose of the attestation standards
    • provide guidance
    • set boundaries
    • provide a measure of quality
    • describe the objectives
  9. What are the concepts that are common to all attestation engagements according to the SSAE
    • C-A-P-E--C-O-R-P
    • Compliance with all relevant attestation standards
    • Acceptance and continuance are satisfactorily performed (accept the client, accept the engagement)
    • Preconditions regarding independence, the subject matter and criteria to be applied are appropriate, the responsible party takes responsibility
    • Engagement documentation standards apply (timeliness, retention, ownership, confidentiality)
    • ==============
    • Reasonable Change to the engagement is acceptable
    • Work of Other practitioners is allowed
    • The auditor is Responsible for appropriate quality control
    • The auditor must use appropriate Professional skepticism and judgement
  10. Define Attestation Risk and its components
    • The risk that the practitioner expresses an inappropriate opinion when the subject matter or assertion is materially misstated.
    • Attestation Risk = (Inherent Risk x Control Risk) x Detection Risk
  11. Which of the 3 components of attestation risk does the practitioner have control?
    Only the detection risk
  12. The practitioner’s report can be issued on either of these two items…
    • The assertion itself, OR
    • The subject matter to which the assertion relates
  13. When must the practitioner select reporting based on the subject matter vs reporting on the assertion itself
    • If there are material misstatements or deviations from the criteria
    • aka a modified report b/c we've already proven the assertion is false so no reason to report on that
  14. True / False: A written assertion is obtained in both examination and review, but not agreed-upon procedure engagements.
    True
  15. What are the 3 groups that the conclusions expressed by the practitioner fall into?
    • Examination (positive assurance)
    • Review (negative assurance)
    • Agreed-Upon Procedures
  16. For an examination: what type of opinion, what level of assurance, what type of procedures?
    • Positive opinion (an opinion)
    • High level of assurance
    • Procedures include search, verification, inquiry, analysis
  17. For a review conclusion for an attestation: what type of opinion, what level of assurance, what type of procedures?
    • Negative opinion (a conclusion)
    • Moderate level of assurance
    • Procedures include inquiry and analytical procedures
  18. For an agreed-upon conclusion for an attestation: what type of opinion, what level of assurance, what type of procedures?
    • NO opinion
    • NO assurance
    • List of findings
  19. The client is the responsible party and refuses to provide a written assertion. How does this influence the practitioner’s report?
    • This is a scope limitation
    • The report must be modified and the report should be tagged with restricted use OR
    • The practitioner should withdraw from the engagement
  20. The client is NOT the responsible party and refuses to provide a written assertion. How does this influence the practitioner’s report?
    The report can be issued as normal, but with restricted use
  21. Attest engagements exclude which 3 types of services?
    • Consulting
    • Advocacy
    • Return Preparation
  22. Review separate file Attestation Procedures vs Subjects
    review
Author
BethM
ID
332866
Card Set
AUD 5.03 - Attestation
Description
Becker Review 2017
Updated

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