what 3 services fall ONLY under the non-assurance services
- tax
- accounting and bookeeping
- majority of managemnt consulting
can management consulting be both assurance and non-assurance
yes, certain management consulting may be in both
what is the major category that is in assurance services and what 2 services are offered in there
the big category is attestation services
in here there is audits and reviews
what 4 services are offered in attestation enganemnts
- audits
- review engament
- certain managment consulting
- specialized reports
when an assurance engamgnet occurs, immediately there is what kind of accountability
three party acocuntability model
what is the three party accountability model, describes who is accountable to who, and can there be more than three parties
- the auditor provides conclusions, is paid by the accountable party, and is accountable to the users
- the accountable party is accountable to the users
- although the auditor is paid by hte accountable party, it is very distinct from a lawyer as the auditor is not working for the person who paid them
- the subject matter is the financial statement and its notes
- there can be more than 3, and the third party may be an external party who is paying for the audit of the acocuntable prty
what is the difference between attest and direct reporting engaements
- ATTEST engamgent is when the accountable party has made explicit assertions in writting
- DIRECT reporting engagement is when there is no explicit assertions made and the auditor needs to develop the explicit standards of performance
what is an example of assertions made for attest engagement
notes of the financial statements - writen assertions
what is an example of an a direct reporting engagement
government auditors assigned to determine whether goals of environmental protection agency are being met
why do auditors need to develop standards in direct reporting engagements
need to be developed because there are no explicit assertions made
what do financial statement reviews provide in terms of assurnce
they provide limited assurance, also called negative assurance
what clients is a review assurance done for
done for clients that do not require an audit
review engagements can be done for specific financial information, give an example of this and why it is done
done for sales if the lease that is being paid has a direct % corralation to sales, thus are done to determine how much is going to be paid
do compilation exngaments provide assurance? what can you do with compilation engagmentns
no assurance, but can be used by accountants to prepare F/S, or tax returns, or compile other types of financial information
does assurance engamgent have its own standards
yes, they have their own general standards. additionally, audit and review have their own specific standards as well
what are the 5 assurance engament general standards
- there should be reasonable basis for believing that the engagement can be completed in accordance with assurance standards
- management must ackknowledge responsibility for subject matter
- auditors must have adequate proficiency to perform the engagement and of the subject matter
- engagnement is performed with due care and objectivity
- criteria for evaluating subject matter should be identified or developed
what are the 3 general standards of AUDIT engagements
- comepetence
- ibjectivity
- due professional care
review engagements have their own standard, the CSRE 2400, what are three important take aways from it
- it must be distinguished and made clear to users that a review engagment was done rather than an audit engagment because review offers less assurance
- only analytical and inquiry procedures are PRIMARILY done
- if auditor becomes aware of possibly material issues, they may perform additional procedures as seen fit
- provides consluion whether F/S, whether modified or unmodified
- ensure you disclose negative/limited assurance provided
what are the 3 REVIEW engagement general standards
- person must have adequate knwoeldge and training in per forming reviews
- due care
- objective state of mind/independence
what does it mean for an individual that is doing a review engament to be proficient
to have good knowledge of the industry
what are the 3 examination standards for REVIEW engagement
- adequate planning and execution
- possess sufficient knoeledge of business so that meaningful enquiries and assessment can be done
- asses whether information is plausible or meaningful using inquiry and analysis
what are the 2 reporting standards for REVIEW engagements
- indicate scope, nature of review, and distinguish it from an audit
- indicate whether anything causes you not to believe the informaion is in accordance with criteria and explain reservations
what sort of companies are review engamgents common for?
private companies
can review engagments be done for public companies and why
yes, but they may be done ONLY on hte interim statemtns, because the FYE ones require an audit
