Transcript OTHER SERVICES AND REPORTS

OTHER SERVICES AND
REPORTS
STATEMENTS FOR CPAS PROVIDING
ACCOUNTING AND AUDITING
SERVICES
• 1939 - COMMITTEE ON AUDITING
PROCEDURES
– STATEMENTS ON AUDITING
PROCEDURES (SAP 1-54)
• 1972 - AUDITING STANDARDS
EXECUTIVE COMMITTEE
– STATEMENTS ON AUDITING
STANDARDS (SAS 1-23)
• 1977 - ACCOUNTING AND REVIEW
SERVICES COMMITTEE
– STATEMENTS ON STANDARDS FOR
ACCOUNTING AND REVIEW SERVICES
(SSARS 1-9)
• 1978 - AUDITING STANDARDS
BOARD
– STATEMENTS ON AUDITING
STANDARDS (SAS 24-87)
• 1985 - AUDITING STANDARDS BOARD
– STATEMENTS ON STANDARDS FOR ACCOUNTANTS’
SERVICES ON PROSPECTIVE FINANCIAL INFORMATION
• 1986 - AUDITING STANDARDS BOARD,
ACCOUNTING AND REVIEW SERVICES
COMMITTEE AND MANAGEMENT ADVISORY
SERVICES EXECUTIVE COMMITTEE
– STATEMENTS ON STANDARDS FOR ATTESTATION
ENGAGEMENTS
• 1989 - AUDITING STANDARDS BOARD,
ACCOUNTING AND REVIEW SERVICES
COMMITTEE AND MANAGEMENT
ADVISORY SERVICES EXECUTIVE
COMMITTEE
– CODIFICATION OF STATEMENTS ON
STANDARDS FOR ATTESTATION
ENGAGEMENTS (SSAE 1-8)
PUBLIC AND NONPUBLIC
ENTITIES
PUBLIC ENTITY DEFINED
• SECURITIES TRADE IN A PUBLIC MARKET
EITHER ON A STOCK EXCHANGE (DOMESTIC
OR FOREIGN) OR IN THE OVER-THE-COUNTER
MARKET, INCLUDING SECURITIES QUOTED
ONLY LOCALLY OR REGIONALLY, OR
• MAKES A FILING WITH A REGULATORY
AGENCY IN PREPARATION FOR THE SALE OF
ANY CLASS OF ITS SECURITIES IN A PUBLIC
MARKET, OR
• A SUBSIDIARY, CORPORATE JOINT VENTURE,
OR OTHER ENTITY CONTROLLED BY A PUBLIC
ENTITY AS DEFINED ABOVE
• SAS - STATEMENTS ON AUDITING
STANDARDS ISSUED BY THE
AUDITING STANDARDS BOARD
• SSARS - STATEMENTS ON
STANDARDS FOR ACCOUNTING AND
REVIEW SERVICES ISSUED BY THE
ACCOUNTING AND REVIEW
SERVICES COMMITTEE
– APPLY TO NONPUBLIC COMPANIES
REVIEW OF FINANCIAL
STATEMENTS OF A NONPUBLIC
ENTITY (AR 100)
DEFINED
• PERFORMING INQUIRY AND ANALYTICAL
REVIEW PROCEDURES THAT PROVIDE THE
ACCOUNTANT WITH A REASONABLE BASIS FOR
EXPRESSING LIMITED ASSURANCE THAT THERE
ARE NO MATERIAL MODIFICATIONS THAT
SHOULD BE MADE TO THE STATEMENTS IN
ORDER FOR THEM TO BE IN CONFORMITY WITH
GAAP OR, IF APPLICABLE, WITH ANOTHER
COMPREHENSIVE BASIS OF ACCOUNTING
PROCEDURES
• OBTAIN KNOWLEDGE OF THE CLIENT AND
INDUSTRY ACCOUNTING PRINCIPLES AND
PRACTICES
• INQUIRE REGARDING PROCEDURES FOR
RECORDING, CLASSIFYING AND SUMMARIZING
TRANSACTIONS, AND FOR DISCLOSING
INFORMATION; ACTIONS TAKEN AT
STOCKHOLDER AND BOD MEETINGS;
WHETHER STATEMENTS HAVE BEEN
PREPARED PER GAAP, APPLIED CONSISTENTLY
• PERFORM ANALYTICAL REVIEW
• OBTAIN CLIENT REPRESENTATION LETTER
REPORT
• STATEMENT THAT REVIEW PER STATEMENTS ON
STANDARDS FOR ACCOUNTING AND REVIEW SERVICES
ISSUED BY THE AICPA AND THAT THE FINANCIAL
STATEMENTS ARE THE REPRESENTATION OF
MANAGEMENT
• DESCRIPTION AND LIMITATIONS OF A REVIEW AND A
DISCLAIMER OF OPINION
• NEGATIVE ASSURANCE
• MARK EACH PAGE "SEE ACCOUNTANT'S REVIEW
REPORT”
• DEVIATE FROM STANDARD REPORT FOR GAAP
DEPARTURES AND INADEQUATE DISCLOSURE
REVIEW OF INTERIM FINANCIAL
INFORMATION FOR PUBLIC
ENTITIES (AU 722)
OBJECTIVE
• TO PROVIDE THE
ACCOUNTANT WITH A BASIS
FOR REPORTING WHETHER
MATERIAL MODIFICATIONS
SHOULD BE MADE TO THE
INTERIM FINANCIAL
INFORMATION TO CONFORM
WITH GAAP
PROCEDURES
•
•
•
•
•
INQUIRE CONCERNING INTERNAL CONTROL (CONTROL
ENVIRONMENT, RISK ASSESSMENT, CONTROL ACTIVITIES,
INFORMATION AND COMMUNICATION, AND MONITORING) AND
CHANGES THEREIN
ANALYTICALLY REVIEW: COMPARISONS TO PRECEDING
PERIODS; CONSIDERATION OF PLAUSIBLE RELATIONSHIPS;
COMPARISONS TO
EXPECTATIONS
READ MINUTES AND THE INTERIM FINANCIAL INFORMATION
INQUIRE WHETHER PER GAAP, CHANGES IN ACCOUNTING,
CHANGES IN BUSINESS ACTIVITY, SUBSEQUENT EVENTS
OBTAIN CLIENT REPRESENTATION LETTER
REPORTING IF PRESENTED
ALONE
• STATEMENT THAT REVIEW PER AICPA
STANDARDS
• DESCRIPTION AND LIMITATIONS OF A REVIEW
AND A DISCLAIMER OF OPINION
• NEGATIVE ASSURANCE
• MARK EACH PAGE "UNAUDITED”
• DEVIATE FROM STANDARD REPORT FOR GAAP
DEPARTURES, INCLUDING INADEQUATE
DISCLOSURE
REPORTING IF INTERIM
FINANCIAL INFORMATION IS
PRESENTED IN A NOTE TO
AUDITED ANNUAL FINANCIAL
STATEMENTS
• MARKED "UNAUDITED”
• NO IMPACT ON AUDITOR'S REPORT
UNLESS OMITTED WHEN REQUIRED,
NOT REVIEWED, APPEARS TO BE NONGAAP
UNAUDITED FINANCIAL
STATEMENTS OF A PUBLIC
ENTITY (AU 504)
– “THE ACCOMPANYING BALANCE
SHEET OF X COMPANY AS OF
DECEMBER 31, 19X1 AND THE
RELATED STATEMENTS OF INCOME,
RETAINED EARNINGS, AND CASH
FLOWS FOR THE YEAR THEN ENDED
WERE NOT AUDITED BY US AND,
ACCORDINGLY, WE DO NOT EXPRESS
AN OPINION ON THEM."
COMPILATION OF FINANCIAL
STATEMENTS OF A NONPUBLIC
ENTITY
DEFINED
• PRESENTING IN THE FORM OF
FINANCIAL STATEMENTS
INFORMATION THAT IS THE
REPRESENTATION OF MANAGEMENT
WITHOUT UNDERTAKING TO
EXPRESS ANY ASSURANCE ON THE
STATEMENTS
PROCEDURES
• KNOW THE CLIENT, ITS
TRANSACTIONS, ACCOUNTING
RECORDS, EMPLOYEES, FINANCIAL
STATEMENTS
• KNOW ABOUT THE ACCOUNTING
PRACTICES OF THE INDUSTRY
• MAKE INQUIRIES
• READ COMPILED STATEMENTS
REPORTING
• STATEMENT THAT COMPILED PER STATEMENTS ON
STANDARDS FOR ACCOUNTING AND REVIEW SERVICES
ISSUED BY THE AICPA
• LIMITATIONS AND DISCLAIMER
• MARK EACH PAGE "SEE ACCOUNTANT'S COMPILATION
REPORT”
• DISCLOSE GAAP DEPARTURES OF WHICH ACCOUNTANT
IS AWARE
• ADDITIONAL PARAGRAPH IF OMIT SUBSTANTIALLY ALL
DISCLOSURES WITHOUT INTENT TO MISLEAD
• ADDITIONAL PARAGRAPH IF NOT INDEPENDENT
ATTESTATION STANDARDS
•
GENERAL
–
–
–
–
–
•
TRAIN
KNOWLEDGE
REASONABLE CRITERIA AND CONSISTENT MEASUREMENT
INDEPENDENT
DUE CARE
FIELD
– PLAN
– EVIDENCE
•
REPORTING
–
–
–
–
ASSERTION AND CHARACTER OF ENGAGEMENT
CONFORMITY WITH CRITERIA
RESERVATIONS
LIMIT USE IF AGREED-UPON PROCEDURES