One may envision a continuum of assurance ranging from absolute assurance to no

Question

One may envision a continuum of assurance ranging from absolute assurance to no assurance. In between may be reasonable assurance, limited assurance, and a summary of findings with no other assurance.

a. Describe in details what level of assurance is provided in the CPA's report by each of the following types of engagements and explain why.

• Examinations
• Audits
• Review
• Agreed-upon procedures
• Compilations

b. Describe in details and explain what type of assurance is provided on financial statements prepared following a special purpose basis of accounting other than generally accepted accounting principles.

Please answer Part B

Explanation / Answer

WHERE THE AUDITOR HAS TO PREPRE AN AUDIT REPORT ON FINANCIAL STATEMENTS PREPARED FOR A SPECIAL PURPOSE FOR EXAMPLE ON CASH BASIS, TAX BASIS etc. THE AUDITOR IS REQUIRED TO GIVE A REASONABLE ASSURANCE AS PER AUDITING STANDARDS. ALTHOUGH THE FINANCIAL STATEMENTS WERE NOT PREPARED AS PER GAAPs , BUT THE AUDITOR HAS TO ENQUIRE ABOUT THE SPECIALPURPOSE ACCOUNTING FRAMEWORK USED FOR THE SPECIAL PURPOSE. AFTER GAINING THE ENOUGH KNOWLEDGE OF REQUIREMENTS OF SPECIAL FRAMEWORK ( REQUIREMENTS OF LAW & REGULATIONS , INTENDED USERS REQUIREMENTS, ETC.) AUDITOR HAS TO OBTAIN THE REASONABLE ASSURANCE THAT WHETHER THE FINANCIAL STATEMENTS ARE FREE FROM MATERIAL MISSTATEMENTS OR NOT AND HAS TO REPORT ACCORDINGLY.

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.