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Attestation Standards: GENERAL STANDARDS 5 of These --

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Attestation Standards: GENERAL STANDARDS 5 of These --

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    1. Attestation Standards: GENERAL STANDARDS (5 of These --"T-K-R-I-D") 1. Training: The examination shall be performed by a practitioner or practitioners having adequate technical training and proficiency in the attest function. 2. Knowledge: The engagement shall be performed by a practitioner or practitioners having adequate knowledge in the subject matter of the assertion.  

    3. GENERAL STANDARDS (Continued) 4. Independence: In all matters relating to the engagement, an independence in mental attitude shall be maintained by the practitioner or practitioners. 5. Due Professional Care: Due professional care shall be exercised in the planning and performance of the engagement.

    4. STANDARDS OF FIELDWORK (2 of These --"P-E") 1. Planning & Supervision: The work shall be adequately planned and assistants, if any, shall be properly supervised. 2. Evidential Matter (Evidence): Sufficient evidence shall be obtained to provide a reasonable basis for the conclusion that is expressed in the report.

    5. STANDARDS OF REPORTING (4 of These --“N-C-R-L") 1. Nature: The report shall identify the assertion being reported on and state the character of the engagement. 2. Conclusion: The report shall state the practitioner’s conclusion about the reliability of the assertion based on the established or stated criteria against which it was measured.

    6. STANDARDS OF REPORTING (Continued) 3. Reservations: The report shall state all of the practitioner’s significant reservations about the engagement and the assertion. 4. Limited Use: The report on an engagement to evaluate an assertion that has been prepared based on agreed-upon criteria or on an engagement to apply agreed-upon procedures should contain a statement limiting its use to the parties who have agreed upon such criteria or procedures.

    7. Attestation Standards (SSAEs) Similar to GAAS (Now 11) General standards [T-K-R-I-D] Technical training in the attest function Knowledge in the subject matter of assertion Reason to believe that the assertion can be evaluated by reasonable criteria and capable of reasonably consistent measurement Independence Due professional care

    8. Attestation Standards (Continued) Standards of fieldwork [P-E] Adequate planning and supervision Sufficient evidence for conclusions Standards of reporting [N-C-R-L] Nature of engagement: whether examination, review, or agreed-upon procedures (or other) Conclusions Reservations: either about the engagement (the criteria used or the scope of work) or about the adequacy of the presentation Limited use (if restricted to specific users)

    9. Attestation -- General Comments Know the definition of “attestation” (SSAEs apply when SASs, SSARSs do not apply) What’s different relative to “auditing” Subject matter differs (now not traditional F/S) Scope & criteria are more negotiable Usual menu of attestation engagements is: examination, review, or agreed-upon procedures (AICPA changes this “menu” in certain specific contexts!)

    10. Examination -- Positive Expression of Opinion (Low Level of “Assurance Risk”) Report should identify material deficiencies As to presentation: qualified or adverse opinion As to scope: qualified opinion or disclaimer Can add an explanatory paragraph for emphasis of a matter Can be issued for general distribution Describe nature of engagement & scope Refer to applicable AICPA standards

    11. Review -- Negative Assurance (“Moderate” Level of “Assurance Risk”) Report should identify material deficiencies Can also add an explanatory paragraph for emphasis of a matter Must include a disclaimer of opinion, since the review provides less assurance than an examination Can be used for general distribution if desired

    12. Agreed-upon Procedures -- Neither Positive nor Negative Assurance Expressed Client may participate in specifying the criteria to be used or the procedures to be performed Report presented as “procedures, findings” Report should still identify any material deficiencies noted Disclaim an opinion Limit distribution to “specified users”

    13. “Prospective” F/S Information 2 Types of “prospective” F/S Forecasts: represents the predicted outcome (that is, the “best guess”) Projections: represents the expected outcome based on certain specified hypothetical assumptions (that is, a “what if…” analysis) AICPA changed the menu for engagements Examination (always on the menu!) COMPILATION (no “review” is permitted!) Agreed-upon procedures (usually on the menu)

    14. Examination of Prospective F/S Responsibilities -- evaluate the presentation of such information and the underlying assumptions for reasonableness Report usually has 2 paragraphs Identify prospective F/S examined & state that examination was made using AICPA standards Express conclusions as to presentation and assumptions (warning that prospective results may not be achieved) Limit distribution? Only a “forecast” can have general distribution; a “projection” must have restricted distribution (add an additional paragraph limiting distribution for a projection)

    15. Compilation of Prospective F/S -- No Assurance Conveyed! Procedures -- read the information, consider whether consistent with AICPA guidelines (including disclosure of major assumptions) Reporting -- usually 2 paragraphs Identify the prospective F/S; state that the compilation was based on AICPA standards State that compilation was limited in scope and disclaim opinion; warn that results may not be achieved; and state that accountant takes no responsibility for events after the report date Any known deficiencies must be identified A “projection” must have restricted distribution

    16. Agreed-upon Procedures and Prospective F/S Procedures -- usually meet with specified users to discuss the scope of engagement Reporting -- usually 3 paragraphs Identify the prospective F/S; restrict the distribution to the specified users; & identify the procedures performed State that scope was less than examination under AICPA standards and disclaim opinion State findings; warn that results may not be achieved; and state that accountant takes no responsibility for events after the report date

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