Ch _21, Other Services PPT

Ch _21, Other Services PPT - Exam Issues Midterm Exam...

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Exam Issues Midterm Exam Review Tues. (Dec. 7) 1:00 – 4:00 (BH #231) Wed. (Dec. 8) 9:00 – noon (BH #310) Final Exam Thurs. (Dec. 9) noon – 1:50 ( BH #300 )
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“Special Reports” AICPA Means 1 of 5 Things! (We’ll Focus on 2 of These) 1. F/S prepared under an “other comprehensive basis of accounting” (not GAAP!) 2. Reporting on audited F/S elements or items (not consistent with “taken as a whole”!) 3. Reporting on compliance with contracts, etc. in connection with audited F/S 4. Special-purpose financial presentations (to comply with contracts, etc.) 5. When financial information is presented in prescribed forms
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F/S Prepared Under An “Other Comprehensive Basis of Accounting” Examples? F/S prepared on the cash-basis of accounting F/S prepared under tax principles F/S prepared under “RAP” F/S prepared using other criteria having “substantial support” (e.g., price-level) Reporting -- same basic structure, except add an “explanatory paragraph” describing the basis used (refer to applicable F/S footnote)
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Reporting on (Audited) F/S Elements, Accounts, or F/S Items Examples--rentals, royalties, profit participation Why isn’t this a “piecemeal” opinion? If the specified item is based on Net Income , must have audited the complete F/S to express an opinion on NI! Reporting--usually consists of 4 paragraphs Introduction Scope (refer to GAAS, since auditing such items) Explanatory paragraph describes agreements involved Opinion Restrict distribution if presented to comply with a contract or other agreement (not GAAP)
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Reviews (Under SSARSs) Procedures Read the F/S for consistency with GAAP Read the minutes of board meetings Perform analytical procedures – F/S reasonable? Inquire of management (about a lot of matters) Reporting (results in “negative assurance”) F/S marked “See Accountant’s Review Report” Standard report consists of 3 paragraphs (includes a disclaimer of opinion) Any GAAP departures should be identified in a separate paragraph
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Compilations (Under SSARSs) Procedures -- assemble the client’s records into F/S format read the F/S for any obvious material misstatements Reporting -- no assurance is expressed F/S marked “See Accountant’s Compilation Report” Standard report consists of 2 paragraphs (includes a disclaimer of opinion) Any known GAAP departures should be identified in a
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This note was uploaded on 04/22/2011 for the course ACCY 360 taught by Professor T during the Spring '08 term at Northern Illinois University.

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Ch _21, Other Services PPT - Exam Issues Midterm Exam...

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