Statements of Position

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Description

This proposed Statement of Position (SOP) was issued to assist CPAs in auditing the statement of social insurance. a financial statement required by Federal Accounting Standards Advisory Board (FASAB) Statement of Federal Financial Accounting Standards (SFFAS) No. 17, Accounting for Social Insurance, and SFFAS No. 25, Reclassification of Stewardship Responsibilities and Eliminating the Current Services Assessment. In summary, a statement of social insurance is a long-term projection of the present value of the income to be received from or on behalf of existing and future participants of social insurance programs (for example, Social Security), the present value of the benefits to be paid to those same individuals, and the difference between the income and benefits. This proposed SOP: 1. Identifies the sources of authoritative accounting standards for the preparation of the statement of social insurance. 2. Describes the components of the statement of social insurance. 3. Identifies management’s responsibilities in preparing the statement of social insurance and the estimates underlying it. 4. Identifies the elements included in the process of developing estimates —factors, assumptions, data, and models. 5. Describes the auditor’s responsibility when auditing the statement of social insurance, including planning the audit, performing substantive procedures, and reporting on the statement of social insurance. 6. Requires the auditor, in certain circumstances, to obtain the services of an outside actuary to assist in performing procedures that assess (1) the methods and assumptions, of the agency’s actuary, and (2) whether the findings of the agency’s actuary are not unreasonable. An outside actuary is an actuary who is not employed or managed by the agency. 7. Contains examples of representations that should be included in a representation letter for an audit of a statement of social insurance. 8. Provides examples of auditor’s reports on the statement of social insurance. 9. Includes an appendix containing examples of: a. Procedures the auditor performs to obtain knowledge about the agency’s process for developing, evaluating, and incorporating estimates in the statement of social insurance; b. Controls that are relevant to the agency’s preparation of the statement of social insurance; c. Procedures the auditor performs to test controls and assertions in the statement of social insurance.

ISBN

ed04-03-05

Publication Date

2004

Relational Format

Book

Keywords

Social security -- Auditing -- Standards -- United States; Audited financial statements -- Standards -- United States

Disciplines

Accounting | Taxation

Comments

Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants; Exposure draft (American Institute of Certified Public Accountants), 2004, March 5

Proposed statement of position : Auditing the statement of social insurance;Auditing the statement of social insurance

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