Chapter _21, Other Reports & Attest Engagements

Chapter _21, Other Reports & Attest Engagements -...

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ACCY 360 Other Reports (on F/S) and Attest Engagements I. Special reports – when issuing a report for which not all of the Generally Accepted Auditing Standards are applicable (or when the report has different objectives than GAAS) [Note: see Ch #18, pp. 626-630] A. Financial statements prepared under an “other comprehensive basis of accounting” [not GAAP] (usually called “OCBOA”) – now the First Standard of Reporting of GAAS (regarding GAAP ) does not apply 1. Examples financial statements prepared using the cash-basis of accounting; financial statements prepared using income tax principles 2. Reporting – usually consists of 4 paragraphs (includes an explanatory paragraph that describes the basis used & refers to the appropriate financial statement note) see the sample report on the next page B. Reporting on specified elements, accounts, or financial statement items when such elements have been audited – now the Fourth Standard of Reporting of GAAS (regarding an opinion on the financial statements “taken as a whole”) does not apply 1. Examples rentals, royalties, profit participation, or provision for income taxes, etc. 2. Reporting considerations a. If presented to comply with a contract or other agreement (not GAAP) – restrict the distribution of the report to the contracting parties b. If the specified item is based upon net income (e.g., profit participation) must have audited the complete financial statements to express an opinion on that “bottom-line” item II. Statements on Standards for Accounting and Review Services (SSARSs) are issued by the AICPA’s “Accounting and Review Services Committee” – these standards apply to reviews and compilations of financial statements for nonpublic entities A. Reviews – performing limited procedures (especially inquiry and analytical procedures) as a basis for expressing limited (or “negative”) assurance on the F/S B. Compilations – presenting the client's information in financial statement form, without providing any level of assurance on it (the accountant functions primarily as an “assembler” of the client’s financial records) Sample Audit Report for Financial Statements Prepared on the Cash Basis See example of these reports on pg. 3
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Independent Auditor's Report We have audited the accompanying statements of assets and liabilities arising from cash transactions of XYZ Company as of December 31, 19X2 and 19X1, and the related statements of revenue collected and expenses paid for the years then ended. 1 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United
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Chapter _21, Other Reports & Attest Engagements -...

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