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Chapter 20 ATTEST AND ASSURANCE SERVICES, AND RELATED REPORTS

OVERVIEW OF ATTEST AND ASSURANCE SERVICES CPA Perform a wide range of assurance services. Assurance services are independent professional services that improve the quality of information, or its context, for decision makers. The financial statement audit has been the cornerstone of the accounting profession. By performing financial statements audits, CPA have developed a reputation for independence, integrity, and objectivity. The four basic level of assurance can be described as follows: Audit or examination level assurance Review level assurance Agreed-upon procedures No assurance

The type of engagements is covered by professional standards developed by the AICPA. These professional standards promote uniformity in quality of practice and enhance users understanding of the differences in the types of services rendered and the levels of assurance with them. The basic professional standards issued by auditing standard board that relate to these services are as follows: Statements on auditing standards Statements on standards for attestation engagements Statements on standards for accounting and review services

OTHER SAS ENGAGEMENTS

Spesial reports are reports resulting from the audit of, or application of agreed-upon procedures to, historical financial data other than financial statements prepared in conformity with GAAP.AU 623. four comprehensive based of accounting other than GAAP are recognized in AU 623.04: a basis used to comply with the requirements of financial reporting provisions of a governmental regulatory agency a basis used to file the entitys income tax return the cash receipts and disbursements basis of accounting and modifications of the cash basis having substantial supports a basic that uses a definite set of criteria that has substantial support such as the price-level basis of accounting ACCEPTING AND PERFORMING ATTEST ENGAGEMENT Attest services are engagements in which a certified public accountant in the practice of public accounting 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 responsibility of another party. The application of agreed-upon procedures does not constitute an audit. This type of service might occur, for example in a proposed acquisition when the prospective purchaser asks the accountant only to reconcile bank balances and confirm the account receivable. Reporting the prospective financial information is generally provided in publics offerings of bonds and other securities. The type of prospective financial information is financial forecast and financial projection. Another are in which CPA are increasingly being asked by regulatory bodies and other to perform additional services is in regard to an entitys compliance with specific requirements such as laws, regulation, contracts, rules, or grants. ACCOUNTING AND REVIEW SERVICES The purpose of review engagements of the financial statements of a nonpublic entity is to perform inquiry and analytical 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 the GAAP. The

purpose of compilation engagements is to present in the form of financial statements information that is the representation of management without undertaking to express any assurance on the statements. OTHER ASSURANCE SERVICES CPA Risk advisory is an assurance engagement on business risk assessment that might include any of the following types of services, identification and assessment of primary potential risks faced by a business or entity, independent assessment of risk identified by an entity, and evaluation of an entitys systems for identifying and limiting risks. CPA performance view is the AICPAs branded version of performance measurements. The AICPA has recognized performance view engagements is to provide assurance regarding an organizations use of both financial and non-financial measures to evaluate the effectiveness and efficiency of its activities.