CPA Auditing and Attestation (AUD) › Types of Engagements - SSAE
As a pre-condition to an agreed-upon procedure engagement.
The auditor is not required to be independent
The auditor is required to be independent
The auditor may agree upon the conclusions of the report with management
The auditor may agree upon the conclusion of the report with regulators
As described in section AT 201, a practitioner may accept an agreed-upon procedure engagement “that the practitioner is independent”.
Of the following, which would not be considered an attest engagement subject to attestation standards?
An engagement to review the financial statements of a nonpublic company
An engagement to review pro forma financial statements
An engagement to examine a financial forecast
An engagement to examine management's assertion about a subject matter
Attest engagements covered under SSAE exclude services performed in accordance with SSARS. Since the review of a nonpublic company's financial statements is conducted under SSARS, it is not subject to attestation standards.
Attestation risk is comprised of all of the following risks except for:
Inherent risk
Control risk
Detection risk
Financial risk
Inherent, control, and detection risks are all components of attestation risk whereas financial risk is not a risk-focused on.
An agreed-upon procedure report is:
Presented in accordance with GAAP
Is a required report mandated by the SEC
Reports the findings of the agreed upon procedures to management
Required to follow IFRS guidelines
An agreed-upon procedure engagement performs specific procedures on a subject matter. These procedures are specified in a contract, by law, or under agreement with management with the auditor reporting on the findings.
According to SSAE 18: The auditor should “establish an understanding with the engaging party regarding the nature of the engagement, including the following":
The intended purpose of the engagement
Whether the report is restricted to use
Whether the engagement is pursuant to any law regulation or contract
All of the answer choices are correct
According to SSAE 18, the practitioner should establish an understanding as to whether there are any restrictions to use. Additionally, the practitioner should establish the purpose of the report and whether the report is pursuant to a law, regulation, or contract.
Of the following standards, which should a CPA firm apply in a review of pro forma financial information?
GAAS
SSARS
Statements on Standards for Consulting Services
SSAE
A CPA should refer to SSAE for a review of pro forma financial information.