1. Six elements of quality control (HELPME) pertaining to accounting firms
    • Human resources
    • Engagement
    • Leadership responsibilities
    • Performance of the engagement
    • Monitoring
    • Ethical requirements
  2. 5 areas of special reports
    • OCBOA
    • specified elements/accounts
    • f/s compliance with regulatory or contractual requirements
    • financial presentation compliance with regulatory or contractual requirements
    • financial info that requires a specific auditor's report
  3. Reporting on OCBOA
    • modify intro and opinion
    • explanatory before opinion
    • for regulatory compliance restrict use
  4. piecemeal opinions
    • NOT allowed if accompanying adverse/disclaimer on major item
    • IS allowed if not accompanying adverse/disclaimer on minor item
  5. report on specific element/account etc.
    • audit required if element is pervasive
    • for contractual compliance restrict use
    • no explanatory
    • modify intro, scope and opinion
  6. Compliance report on audited f/s
    • auditor must have audited f/s
    • only give negative assurance
    • no report if adverse or disclaimer was given
    • issued in separate report with restriction paragraph
  7. 2 levels of unaudited f/s services
    • compilation
    • review
  8. compilation
    • attest, but no assurance
    • present info in form of f/s
    • no audit/review procedures or opinion
  9. review
    • attest and assurance
    • limited/negative assurance on unaudited f/s
    • no material modifications needed
    • inquiry and analytical procedures
    • NO i/c understanding or control risk assessment
  10. SSARS applicability
    • compilation and review of nonissuers
    • specific elements reports
    • pro forma financial info
  11. compilation engagement letter
    • presumptively mandatory
    • create understanding with management
    • objectives of engagement
    • responsibilities of management and accountant
  12. compilation of f/s with omitted disclosures allowed
    • indicate omission with extra paragraph
    • f/s otherwise conform with GAAP
    • deception was not intended
  13. compilation of personal financial statements
    • governed by SSARS
    • SSARS not required if f/s not used for credit
  14. Items not required for review
    • Test internal controls
    • Perform audit tests
    • Assess fraud risk
    • Communicate with predecessor accountant
  15. Analytical procedures
    • develop expectation
    • use comparisons and ratios
    • f/s or individual acct level
  16. If client departs from financial framework (comp or review)
    • add separate disclosure paragraph to end of accountants report
    • if disclosure isn't enough, withdraw
    • not opinion is given
  17. Considerations before changing an engagement
    • reason for request
    • effort required to complete it
    • estimated additional cost
  18. comparative f/s report when CY is reviewed and PY is compiled (service upgrade)
    update PY report and issue as last paragraph of CY report
  19. comparative f/s report when CY is compiled and PY is reviewed (service downgrade)
    • add paragraph to CY compilation report
    • OR
    • reissue PY review report
    • in either case say that no review prodecures were done after date of PY report
  20. predecessor's PY report reissued unchanged OLD accountant should
    • read CY stmts and report
    • compare PY stmts with CY stmts
    • obtain letter from NEW accountant
  21. predecessor's report not reissued NEW accountant should
    • reference PY report in CY report with additional paragraph
    • OR
    • do the work themselves
  22. from audited to unaudited
    • add additional paragraph
    • say no audit procedures done since date of PY report
  23. from unaudited to audited
    • add additional paragraph
    • say PY service was less in scope
    • disclaim public review
    • describe non public services
  24. review of public interim f/s
    • same procedures as private review
    • U LIAR CPA
  25. accountants responsibility for public review report
    • use SAS or PCAOB standards
    • comply with 3 general standards always, fieldwork and reporting if relevant
    • no opinion or i/c assurance
  26. management representation is required
    • completeness of info provided
    • responsibility for controls
    • disclose significant deficienies of i/c
    • knowledge of fraud or suspected fraud
  27. Review report on interim financials
    • clearly marked unaudited
    • state info is mngt responsibility
  28. departure from financial framework
    • add explanatory paragraph before concluding paragraph
    • modify concluding paragraph
  29. If report on interim financials in a registration statement
    statement that report is not part of registration statement
  30. trust services
    • addresses risks and opportunities related to IT
    • WebTrust engagement=assurance related to e-commerce
    • SysTrust engagement=assurance related to reliablity of specific electronic system
  31. Attestation different from GAAS standards
    • no reference to f/s
    • no reference to GAAP
    • assurance level below GAAS audit
  32. 11 attestation standards
    • 5 general
    • 2 fieldwork (no i/c assessment)
    • 4 reporting
  33. 5 general attestation standards
    • Training and proficiency
    • Independence
    • Professional care in planning and performance
    • Professional knowledge of subject matter
    • Your belief that subject can be evaluated appropriately
  34. 2 fieldwork attestation standards
    • Planning and supervision
    • Appropriate, sufficient evidence
  35. 4 reporting attestation standards
    • Subject matter of assertion is identified
    • Significant reservations are disclosed
    • Express conclusions
    • Restrict use if needed
  36. 3 attestation conclusions
    • Examination=+ opinion, high assurance, procedures include search, verification, inquiry and analysis
    • Review=-assurance, moderate level, inquiry and analytical procedures
    • Agreed-upon procedures=NO assurance, list procedures and findings
  37. prospective financial statements
    • expected financial position and results of operations
    • review is not allowed
    • forecasts
    • projections
    • NOT pro forma
  38. financial forcast
    • expected results
    • based on expected conditions and actions
    • report can be general or limited use
  39. financial projection
    • what if...results
    • based on hypothetical assumptions
    • report must be restricted
  40. compilation of prospective f/s
    • entity MUST disclose summary of significant assumptions
    • report states no assurances and results may not happen
  41. examination of prospective f/s
    • express an opinion (conformity with AICPA guidelines and assumptions are reasonable)
    • indepedence is required
Card Set
A2 flashcards