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NON-ASSURANCE SERVICES

NON-ASSURANCE SERVICES. ACT 3142. ATTESTATION ENGAGEMENTS. Assurance svcs = independent professional svcs that improve the quality of information for decision makers. Currently = variety of audit-like or attest svcs for different purposes. ATTESTATION ENGAGEMENTS.

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NON-ASSURANCE SERVICES

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  1. NON-ASSURANCE SERVICES ACT 3142

  2. ATTESTATION ENGAGEMENTS • Assurance svcs = independent professional svcs that improve the quality of information for decision makers. • Currently = variety of audit-like or attest svcs for different purposes

  3. ATTESTATION ENGAGEMENTS • In AE = audit reports on the reliability of information or an attestation – another party • E.g. A bank requests an auditor to report in writing whether an audit client has adhered to all requirements of a loan agreement

  4. ATTESTATION ENGAGEMENTS • Important prerequisite = the practitioner needs to have adequate knowledge of the subject matter • E.g. attestation of a company’s compliance with environmental protection laws. • E.g. SMS nomination => Akademi Fantasia, Juara Lagu TV3, Malaysian Idol, many others

  5. LEVEL OF SERVICE • In Malaysia, ISAs = 4 levels of engagement and related forms of conclusions: • Prospective financial statements examination (ISA 810) • Reviews engagement (ISA 910) • Agreed-upon procedures (ISA 920) • Compilation of financial information (ISA 930)

  6. EXAMINATION • An examination results in a conclusion that is in a positive form. • Make direct statement – conform to the applicable criteria • Distribution of report = Unrestricted

  7. REVIEW • In a review, the practitioner provides a conclusion in the form of negative assurance • Report – whether the financial statements are prepared in accordance with accounting stds. • Distribution of report = Unrestricted

  8. AGREED-UPON PROCEDURES • The procedures to be performed are agreed upon by the practitioner, the responsible party making the assertions, and the specific persons who are the intended users of the practitioner’s report. • Report – limited distribution.

  9. ATTESTATION STANDARDS • 4 common types of engagements – detailed attestation stds have been issued: • Web Trust Services • SysTrust Services • Prospective Financial Statements • Agreed-upon procedures

  10. WebTrust Services • A client engages an audit to provide reasonable assurance that a company’s web site complies with certain Trust Services principles and criteria for one or more aspects of e-commerce activities. • A site that meets the Trust Services principle is eligible to display the WebTrust electronic seal on its transaction or order page. • The presumption is that Web site users believe the WebTrust seal adds credibility to the information in the website.

  11. SysTrust Services • The AICPA and CICA = developed the SysTrust Service to provide assurance that a system is reliable. • In a SysTrustengagement – the SysTrustlicensed accountant evaluates a company’s computer system using Trust Services principles and criteria and determines whether controls over system exist.

  12. Prospective Financial Statements • Forecasts • Projections • Covered in last week’s lecture!!!

  13. Agreed-Upon Procedures Engagements • AUPE = auditor and management or a third party user agreed that the audit will be limited to certain specific audit procedures. • E.g. the auditor performed agreed-upon procedures on the gross sales account for a lease agreement.

  14. Review and Compilation Services • Entities such as partnership and sole-proprietorship – financial statements reviewed and compiled. • Preparation of financial statements – internal / external • No audit • No assurance expressed

  15. Review of Interim Financial Information for Public Companies • Auditor – perform review procedures – footnote information.

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