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Auditing aicpa, assurance and attestation services

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Auditing aicpa, assurance and attestation services

  1. 1. AUDITINGCHAPTER 18Other Assurance &Attestation ServicesByDavid N. Ricchiute
  2. 2. TOPICS AICPA Special Committee on Assurance Services Assurance services Attestation services2 GBW 8th ed., Ch. 18
  3. 3. ATTESTATIONSERVICES Assurance services  Improve or report on information Attestation services  Offer assurance about a matter that is responsibility of another party3 GBW 8th ed., Ch. 18
  4. 4. ASSURANCE SERIVCES Electronic commerce Health care performance Risk assessment Information systems reliability Business performance Elder care4 GBW 8th ed., Ch. 18
  5. 5. ELECTRONIC COMMERCEASSURANCES: WebTrustCPA offers assurance in form of opinion Data integrity  Does processing alter transactions? Data security  Do systems preclude unauthorized disclosure?5 GBW 8th ed., Ch. 18
  6. 6. DATA SECURITY Parties to a transaction are authentic Transactions, documents are protected6 GBW 8th ed., Ch. 18
  7. 7. WEBTRUST PRINCIPLESPrinciple The CompanyBusiness Discloses, executes transactions inpractices accord with its business practices for e-commerceTransaction Maintains effective controls tointegrity assure e-transactions completed, billed as agreedInformation Maintains effective controls toprotection assure customer privacy7 GBW 8th ed., Ch. 18
  8. 8. COMMERCEASSURANCES: SysTrustCPA offers assurance in form of opinion Reliability of company’s information system  Availability  Security  Integrity  Maintainability8 GBW 8th ed., Ch. 18
  9. 9. SYSTRUST PRINCIPLESPrinciple The Company’s SystemAvailability Available for operation per service agreementsSecurity Protected against unauthorized physical, logical accessIntegrity Complete, accurate, timely,Maintainability authorized Updated as required providing for availability, security, integrity9 GBW 8th ed., Ch. 18
  10. 10. HEALTH CAREASSURANCES:Examples Testing research programs (UC-SD) for  False insurance claims  Unjustifiable billings  Illegal use embryos Benchmarking performance Quality assurance for healthcare10 GBW 8th ed., Ch. 18
  11. 11. PAST CORECOMPETENCIES Knowledge of accounting principles, auditing standards Facility in evaluating evidence Knowledge how to manage risk Tack in engaging, maintaining clients11 GBW 8th ed., Ch. 18
  12. 12. ATTESTATIONSERVICES Review Compilation OCBOA Other12 GBW 8th ed., Ch. 18
  13. 13. REVIEW ENGAGEMENT:Non-Public Companies Complies with attestation standards Procedures  Inquiries  Analytical procedures Report  Negative assurance  Accountant “not aware of any material modifications” necessary for GAAP13 GBW 8th ed., Ch. 18
  14. 14. PROCEDURES FORREVIEWS Analytical procedures to identify unusual matters  Compare current to prior period financials  Compare financial to budgets, forecasts  Study relationships for predictable patterns14 GBW 8th ed., Ch. 18
  15. 15. INQUIRIES FORREVIEWS Inquiries about  Accounting principles, practices, GAAP  Actions of Board  Reports of subsidiaries’ accountants  Changes in entity’s business, accounting principles  Questions, concerns  Subsequent events15 GBW 8th ed., Ch. 18
  16. 16. COMPILATIONENGAGEMENT: Non-PublicCompanies “presenting in the form of financial statements information that is the representation of management without undertaking to express any assurance on the statements” SSARS No. 1 16 GBW 8th ed., Ch. 18
  17. 17. KNOWLEDGE FORCOMPILATIONS Knowledge of accounting principles, practices in industry Understanding of entity’s transactions, accounting records, & qualifications of accounting personnel17 GBW 8th ed., Ch. 18
  18. 18. COMPILATION REPORTStates explicitly that Audit not performed Opinion not expressed18 GBW 8th ed., Ch. 18
  19. 19. INTERIM FINANCIALSTATEMENTS: PublicCompanies Reviews required by SEC for 10-Q of publicly traded companies Reviews not adequate to form opinion  Report gives negative assurance19 GBW 8th ed., Ch. 18
  20. 20. INTERIM REVIEW:Analytical Procedures Analytical procedures to identify unusual matters  Compare interim to prior interim  Compare recorded amounts, ratios to budgets, forecasts, industry gross margin  Consider plausible relationships, ratios  Compare disaggregated revenue information20 GBW 8th ed., Ch. 18
  21. 21. INTERIM REVIEW:Other Procedures Inquiries about  Internal controls, changes  Reports of subsidiaries’ accountants  Changes in entity’s business, accounting principles  Questions, concerns  Subsequent events Read board minutes Consider conformity with GAAP Obtain management’s written representation21 GBW 8th ed., Ch. 18
  22. 22. ACCOUNTING OTHER THANGAAP 4 generally accepted comprehensive bases of accounting Cash basis Regulatory basis Tax basis Criteria having substantial support  Price-level adjusted statements 22 GBW 8th ed., Ch. 18
  23. 23. SPECIFIED ELEMENTS Includes  Accounts or items of financial statements  Nonfinancial statement assertions Procedures & report  GAAS & express opinion  Agreed-upon procedures & express limited assurance23 GBW 8th ed., Ch. 18
  24. 24. AGREED-UPONPROCEDURES Procedures are engagement specific Procedures not sufficient to express opinion Provides limited assurance24 GBW 8th ed., Ch. 18
  25. 25. OTHER ATTESTENGAGEMENTS Compliance with contracts, regulations Letters for underwriters Financial forecasts, projections Personal financial statements Application of accounting principles25 GBW 8th ed., Ch. 18

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