Additional Assurance Services: Other Information

1
Additional Assurance Services Other Information
2
Assurance and Attestation Services

• Assurance Services broad range of information
  enhancing services provided by CPAs.
• AICPA def. services that improve the quality
  of information, or its context, for decision
  makers.
• Two types of assurance services
• 1. Those that increase information reliability
  (attest)
• 2. Those that involve putting information into
  a certain form or context

3
Assurance and Attestation Services

• Attest engagement as defined by AICPA
• a practitioner is engaged to issue or does issue
  an examination, a review, or an agreed-upon
  procedures report on subject matter or an
  assertion about subject matter that is the
  responsibility of another party.

4
Relationship Between Assurance and Attestation
Assurance Services
Assurance Services that are Attestation Services
Historical Financial Statement Related
Other Information

• Audits
• Reviews
• Special Reports
• Personal financials
• Comfort letters

• Prospective financial information
• Compliance
• WebTrust
• SysTrust
• Internal control

• Other
• ElderCare

5
Important Aspects of an Attest Engagement

• Subject matter
• Reasonable criteria
• Attestation risk and materiality

6
Subject Matter

• Historical or prospective performance or
  condition
• Physical characteristics
• Historical events
• Analyses
• Systems or processes
• Behavior

7
Criteria

• Suitable
• Objective
• Permits reasonable consistent measurements
• Complete
• Relevant
• Available (and understandable)
• Publicly available
• Presented in a summary, the assertion or the
  practitioners report

8
Attestation Risk and Materiality

• Attestation risk
• Analogous to audit risk
• Inherent risk, control risk and detection risk
• Materiality
• May be considered in quantitative or qualitative
  terms.
• Often difficult to measure for non-financial or
  qualitative subject matter.
• Professional judgment especially important for
  qualitative subject matter.

9
Character of Attestation Engagements

• Examinations
• Reviews
• Agreed-upon procedures

10
Examination Report
INDEPENDENT ACCOUNTANTS REPORT
We have examined the accompanying schedule of
investment performance statistics of Keller
Investment Fund for the year ended December 31,
20X2. This schedule is the responsibility of
Keller Investment Funds management. Our
responsibility is to express an opinion on this
schedule based on our examination. Our
examination was conducted in accordance with
attestation standards established by the American
Institute of Certified Public Accountants and,
accordingly, included examining, on a test basis,
evidence supporting the schedule and performing
such other procedures as we considered necessary
in the circumstances. We believe that our
examination provides a reasonable basis for our
opinion. In our opinion, the schedule of
investment performance statistics referred to
above presents fairly, in all material respects,
the performance of Keller Investment Fund for the
year ended December 31, 20X2, in conformity with
the measurement and disclosure criteria set forth
by the Association of Investment Management
Research, Inc., as described in Note 1. Will
Bailey, CPA January 30, 20X3
11
Examples of Assurance Services

• Financial forecasts and projections
• Forecasts may be for general use, while
  projections should have restricted use.
• Both should include
• Certain minimum prospective financial statement
  items and background information.
• List of major assumptions and accounting
  policies.
• Only examinations or agreed-upon procedures
  (attestation standards prohibit reviews of
  prospective financial information).
• Opinions from examinations may be unqualified,
  qualified, adverse or disclaimer.

12
Examples of Assurance Services

• Assurance on Internal Control
• Must have control criteria, such as COSOs
  Internal Control Integrated Framework.
• Increased scope over consideration of internal
  control for audit purposes.
• CPA is required to obtain an appropriate
  assertion from management concerning internal
  control.
• May report on either internal control directly or
  the assertion.
• Only examinations or agreed-upon procedures
  (standards prohibit reviews of internal control).
• Opinions from examinations may be unqualified,
  qualified, adverse or disclaimer.
• Examination of internal control now required as
  part of financial statement audit for public
  companies under Sarbanes-Oxley 2002.

13
Management Report on Internal Control
Winstad Company maintains internal control over
financial reporting, which is designed to provide
reasonable assurance to the Company's management
and board of directors regarding the preparation
of reliable published financial statements.
Internal control contains self-monitoring
mechanisms, and actions are taken to correct
deficiencies as they are identified. Even with
effective internal control, no matter how well
designed, has inherent limitations---including
the possibility of the circumvention or
overriding of controls---and therefore can
provide only reasonable assurance with respect to
financial statement preparation. Further, because
of changes in conditions, internal control
effectiveness may vary over time. The Company
assessed its internal control as of December 31,
20x5, in relation to criteria for effective
internal control over financial reporting
described in Internal Control---Integrated
Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based
on this assessment, the Company believes that, as
of December 31, 20x5, its internal control over
financial reporting met those criteria. Win
stad Company by Will Jones
Chief Executive Officer January 20,
20x6 by Linda Beok Chief Financial
Officer
14
Accountants Report on Internal ControlFirst
Paragraph
We have examined management's assertion that
Winstad Company has maintained an effective
internal control over financial reporting as of
December 31, 20X5, included in the accompanying
Management Report on Internal Control, based on
the criteria for effective internal control over
financial reporting established in Internal
Control Integrated Framework, issued by COSO of
the Treadway Commission. Winstad Companys
management is responsible for maintaining
effective internal control over financial
reporting. Our responsibility is to express an
opinion on managements assertions based on our
examination.
15
Accountants Report on Internal Control Second
Paragraph
Our examination was made in accordance with
standards established by the American Institute
of Certified Public Accountants and, accordingly,
included obtaining an understanding of internal
control over financial reporting, testing and
evaluating the design and operating effectiveness
of internal control, and such other procedures as
we considered necessary in the circumstances. We
believe that our examination provides a
reasonable basis for our opinion.
16
Accountants Report on Internal Control Third
Paragraph
Because of inherent limitations of internal
control, errors or irregularities may occur and
not be detected. Also, projections of any
evaluation of internal control over financial
reporting to future periods are subject to the
risk that internal control may become inadequate
because of changes in conditions, or that the
degree of compliance with the policies or
procedures may deteriorate.
17
Accountants Report on Internal Control Fourth
Paragraph
In our opinion, management's assertion that
Winstad Company has maintained an effective
internal control over financial reporting as of
December 31, 20X5, is fairly stated, in all
material respects, based upon criteria
established in Internal Control---Integrated
Framework issued by the Sponsoring Organizations
of the Treadway Commission.
18
Examples of Assurance Services

• WebTrust Assurance on Electronic Commerce
• Typical assertions
• Disclosure of business practices for electronic
  transactions and execution of transactions in
  accordance with the disclosed practices.
• Maintenance of effective controls to provide
  reasonable assurance that customers orders were
  completed and billed as agreed.
• Maintenance of effective controls to provide
  reasonable assurance that private customer
  information was protected from unrelated uses.
• Report may be examination or agreed-upon
  procedures
• Report covers period of at least two months and
  must be updated at least annually.

19
Examples of Assurance Services

• Systrust Assurance on System Reliability
• Evaluation of the following four principles of a
  reliable system (criteria)
• Availability. The system was available for use
  at times set forth in service-level statements or
  agreements.
• Security. The system was protected against
  unauthorized physical or logical access.
• Integrity. The system processing was complete,
  accurate, timely and authorized.
• Maintainability. The system could be updated when
  required in a manner that continued to provide
  for system availability, security, and integrity.
• Report may be examination or agreed-upon
  procedures
• Report covers period of at least two months and
  must be updated at least annually.

20
Examples of Assurance Services

• Eldercare services
• CPAs provide assurance to individuals that the
  needs of elderly family members with
  assisted-living are being met. May include
  reporting on
• Financial matters
• Performance of healthcare providers
• Performance of caregivers