ACCT_404_Module_A - ACCT 404 MODULE A Other Public...

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ACCT 404 MODULE A Other Public Accounting Services LEARNING OBJECTIVES Review Checkpoints Exercises, Problems, and Simulations 1. Explain and provide examples of attestation engagements. 1, 2, 3, 4 35, 37, 38, 55 2. Describe review and compilation of unaudited financial statements, and write appropriate reports, given specific fact circumstances. 5, 6 36, 39, 40, 41, 43, 44, 53 3. Explain the auditors’ responsibilities related to reporting on interim financial information. 7, 8 45, 46 4. Define, explain, and give examples of other special reports provided by auditors, including specified elements of financial statements, special purpose frameworks (SPF), and application of accounting principles. 9, 10, 11 42, 47, 54 5. Explain and give examples of assurance services. 12, 13, 14 48, 49, 50, 51, 52 SOLUTIONS FOR REVIEW CHECKPOINTS A.1 An attestation engagement is defined as “an engagement in which a practitioner is engaged to issue or does issue an examination, a review, or an agreed-upon procedures report on subject matter or an assertion about the subject matter, that is the responsibility of another party.” Attestation engagements include: Agreed Upon Procedures Engagements (AT 201) Financial Forecasts and Projections (AT 301) Reporting on Pro Forma Financial Information (AT 401) Reporting on an Entity’s Internal Control over Financial Reporting (AT 501) Compliance Attestation (AT 601) Management’s Discussion and Analysis (AT 701) Reports on controls at Service Organizations (AT##) A.2 a. Both require management assertions to begin--an assertion(s) of compliance with specified laws and regulations, or assertions in financial statements. Page 1 of 21
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Module A - Other Public Accounting Services b. Both require adherence to professional standards that are themselves very similar regarding training and proficiency, independence, due care, planning and supervision, and sufficient competent evidence. c. Both require consideration of materiality. d. Both require consideration of inherent, control, and detection risk. e. Both require tests of controls when assessing control risk below the maximum. f. Both require audit procedures--audit of balances for financial audits, tests of compliance for compliance work. g. Both require written management representation letters. h. Both require consideration of subsequent events (of both "types"--subsequent information that bears on the management assertion and subsequent events of noncompliance after the assertion date.) i. Both require a report, and the standard unqualified report is almost identical to the standard unqualified report on financial statements. A.3 A service organization is a business that executes or records transactions on behalf of the client. They have their auditors provide reports on controls to provide comfort to user entities and the user entities’
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This note was uploaded on 10/20/2011 for the course ACCT 404 taught by Professor T during the Fall '11 term at Lee.

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ACCT_404_Module_A - ACCT 404 MODULE A Other Public...

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