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Statements on Standards for Attestation Engagements

Statements on Standards for Attestation Engagements. Clarifying the Attestation Standards. Commonly known as attestation standards Apply to engagements that address subject matter other than historical financial statements , e.g : an entity’s compliance with laws or regulations

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Statements on Standards for Attestation Engagements

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  1. Statements on Standards for Attestation Engagements

  2. Clarifying the Attestation Standards • Commonly known as attestation standards • Apply to engagements that address subject matter other than historical financial statements, e.g: • an entity’s compliance with laws or regulations • the effectiveness of an entity’s controls over the privacy of information • a financial forecast • Address examination, review and agreed-upon procedures (AUP) engagements

  3. Clarifying the Attestation Standards • 4 “general” AT sections that provide a framework for developing an attestation engagement • AT 20, Defining Professional Requirements in Statements on Standards for Attestation Engagements • AT 50, SSAE Hierarchy • AT 101, Attest Engagements (which addresses examination and review engagements) • AT 201, Agreed-Upon Procedures Engagements

  4. Clarifying the Attestation Standards • Currently: 6 “topic-specific” AT sections for reporting on • prospective financial information (AT 301) • pro forma financial information (AT 401) • internal control over financial reporting (AT 501) • compliance with laws and regulations (AT 601) • management’s discussion and analysis (AT 701) • controls at service organizations (AT 801)

  5. Clarifying the Attestation Standards • Objective: to make AT sections easier to read, understand and apply • Redraft in clarity format • New structure (objective is to eliminate repetition) • Chapter 1: Concepts common to all attestation engagements • Chapters 2-4: Levels of service (examination, review, agreed-upon procedures). • Each chapter addresses a specific level of service and builds on the common concepts chapter • Subject-matter specific chapters • Each chapter builds on common concepts and level of service chapters

  6. Clarifying the Attestation Standards • Example – Reporting on an examination of prospective financial information • Currently, the following AT sections apply: • AT 20 • AT 50 • AT 401 • Proposed structure, the following sections would apply: • Chapter 1, Common Concepts • Chapter 2, Examinations • Chapter X, Forecasts

  7. Clarifying the Attestation Standards • Convergence with standards of the International Audit and Assurance Standards Board (IAASB) • Foundation for the common concepts, examination, and review sections of the proposed attestation standards: • AICPA’s existing attestation standards • IAASB International Standards on Assurance Engagements (ISAE) 3000, “Assurance Engagements Other than Audits or Reviews of Historical Financial Information” (Dec 2013) • ISAE 3000 is IAASB’s framework standard for assurance engagements (equivalent of attestation engagements) • ISAE 3410, Assurance Engagements on Greenhouse Gas Emissions

  8. Clarifying the Attestation Standards • Convergence with standards of the International Audit and Assurance Standards Board (IAASB) • AT 801 was converged with ISAE 3402, Assurance Reports on Controls at a Service Organization, when SSAE No. 16, Reporting on Controls at a Service Organization,was issued in April 2010 • Proposed “Reporting on Pro Forma Financial Information,” includes elements of ISAE 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus

  9. Clarifying the Attestation Standards • July 2013, the ASB issued an exposure draft of the first four “chapters” • Common Concepts • Examinations • Reviews • Agreed-upon Procedures • January 2014, the ASB issued an exposure draft of the following subject-specific chapters: • Financial Forecasts and Projections • Reporting on Pro Forma Financial Information • Compliance Attestation

  10. Clarifying the Attestation Standards • AT 801 exposure vote on July 2014 ASB agenda • Reporting on Controls at Service Organization • Delayed to include guidance from AAG • One section not being clarified: • Management’s Discussion and Analysis (AT 701) • Will remain unclarified • One section moving and being replaced • An Examination of an Entity’s Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements (AT 501) • Will be moved to auditing standards • Will be replaced by generic AT 501 examination standard on internal control

  11. Clarifying the Attestation Standards • Final clarified SSAE will contain all attestation standards • One SSAE (SSAE No. 18) even though more than one exposure draft • Expected issuance in second half of 2015 (estimate) • Proposed effective date (estimate): • No earlier than for reports dated December 15, 2015

  12. Clarifying the Attestation Standards • Exposure drafts http://www.aicpa.org/Research/ExposureDrafts/AccountingandAuditing/Pages/ExposureDrafts_ASB.aspx • More information Dedicated ASB Attest Clarity page on AICPA Website at http://www.aicpa.org/InterestAreas/FRC/AuditAttest/Pages/AttestClarityProject.aspx

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