Modern Auditing Assurance Services and the Integrity of

Modern Auditing: Assurance Services and the Integrity of Financial Reporting, 8 th Edition William C. Boynton California Polytechnic State University at San Luis Obispo Raymond N. Johnson Portland State University Chapter 20 – Attest and Assurance Services, and Related Reports

Chapter Overview

Universe of Assurance Services

Levels of Assurance • Audit or Examination-level Assurance • Review-level Assurance – Negative Assurance • Agreed-upon Procedures • No Assurance – Accounting and Compilation Services

Assurance/Service Matrix

Types of Engagements • Statements on Auditing Standards (SAS) • Statements on Standards for Attestation Engagements (SSAE) • Statements on Standards for Accounting and Review Services (SSARS)

Other SAS Engagements – Special Reports • Other Comprehensive Bases of Accounting • Specified Elements, Accounts, or Items of a Financial Statement • Compliance Reports Related to Audited Financial Statements

Study Break 1. This level of assurance intends to give the positive expression of opinion by the CPA regarding an assertion by management. A. B. C. D. Audit-level assurance Review-level assurance Agreed-upon procedures No assurance A. Audit-level assurance

Study Break 2. This defines the services associated with the review or the compilation of financial statements of a nonpublic entity. A. B. C. D. SAS SSAE SSARS GAAS C. SSARS

Accepting and Performing Attest Engagements • Attest Engagement – Gathers evidence – Objectively assesses the measurements and communication – Reports the findings • Attestation Standards – – SSAE 1 (Figure 20 -7) General Standards of Fieldwork Standards of Reporting

Engagements Performed Under Attestation Standards • SSAE 101 Engagements – CPA Web. Trust • Business and information privacy practices • Transaction integrity • Information protection – CPA Sys. Trust • • Availability Security Integrity Maintainability

Engagements Performed Under Attestation Standards • Agreed-upon Procedure Engagements – Report of Procedures and Findings • Reporting on Prospective Financial Information – Types of Prospective Financial Information • Financial Forecast • Financial Projection – Types of Services • Compilation • Examination • Application of Agreed-upon Proceures

Engagements Performed Under Attestation Standards • Compliance Attestation – Examination Engagements • Nature of Compliance Requirements • Nature and Frequency of Noncompliance • Qualitative Considerations – Agreed-upon Procedure Engagements • Compliance with Specified Requirements • Effectiveness of Entity’s Internal Control • Both of the Above

Accounting and Review Services • Nonpublic Companies – Review of Financial Statements • Review Engagement – Compilation of Financial Statements • Compilation Engagement

Other Assurance Opportunities • CPA Risk Advisory – Business Risk Management • Identification and assessment of primary potential risks • Independent assessment of identified risks • Evaluate system of identification and limitation of risks

Other Assurance Opportunities • CPA Performance View – Performance Measurement • Assess whether systems a properly measuring activities • Evaluate employees • Measure actual performance against objectives • Identify areas providing best opportunities for improvement

Other Assurance Opportunities • CPA Eldercare – Attestation Engagements – Direct Services – Consulting Services

Study Break 3. All of the following are risks associated with doing business electronically, except: A. B. C. D. Business and information privacy practices Transaction integrity Information protection All of the above D. All of the above

Study Break 4. Of the four Sys. Trust Principles, this one describes the system being protected against unauthorized physical and logical access. A. B. C. D. Availability Security Integrity Maintainability B. Security

Study Break 5. This type of prospective financial information presents, to the best of the responsible party’s knowledge and belief, an entity’s expected financial position, results of operations, and cash flows. A. B. C. D. Budget Financial forecast Financial projection All of the above B. Financial forecast

Study Break 6. This is the AICPA’s branded version of performance measure. A. B. C. D. CPA Compilations CPA Risk Advisory CPA Performance View CPA Eldercare C. CPA Performance View