Statements of Position

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An attestation engagement is one in which a practitioner expresses a conclusion about the reliability of a written assertion or statement that is the responsibility of another party. For example, management may state that the entity's internal control over financial reporting is effective as of a certain date or for a specified period of time. Such engagements are performed pursuant to the Statements on Standards for Attestation Engagements (SSAEs) which are promulgated by the Auditing Standards Board (ASB). The type of subject matter that could be addressed by such assertions is broad and includes internal control, compliance with laws and regulations, or other subject matter that could be useful to a decision maker. [A practitioner's engagement to report on historical financial statements is excluded from the scope of the SSAE as such engagements are addressed by the Statements on Auditing Standards (SASs).] The SSAEs were first issued approximately ten years ago. During the past several years, there has been a proliferation of engagements performed pursuant to the SSAEs. The ASB believes that the demand for attest engagements will continue to grow as decision makers increasingly look to CPAs to to enhance the reliability of information on which decision makers rely, beyond historical financial statements. For example, it is expected that many of the services developed by the Assurance Services Executive Committee of the AICPA will include engagements performed pursuant to the SSAEs. The recently developed Web Trust service, which provides assurance about policies and controls of entities offering services or products for sale over the Internet, is an example of such a service provided pursuant to the SSAEs. Additionally, regulators are increasingly looking to obtain assurance from the public accounting profession as to the reliability of an entity's assertions about internal control, compliance with laws and regulations and a variety of other matters. Finally, the SSAEs allow a great deal of flexibility as to the nature and scope of the engagement and provide the profession with many opportunities to help decision makers satisfy their needs. The ASB has undertaken a series of projects to improve the utility of the SSAEs. This exposure draft is one of a series of anticipated exposure drafts resulting from the ASB's efforts to achieve this objective. In order to improve the utility of the SSAEs, the ASB intends to focus on the needs of the decision makers and to identify improvements that can be made to the SSAEs to best meet those needs. This exposure draft focuses primarily on improving the understandability of the conclusions communicated by the practitioner in an attest engagement. Additionally, by clarifying how the Statements on Quality Control Standards (SQCSs) relate to the SSAEs, the ASB is explicitly recognizing the importance of performing attestation engagements within an appropriate framework to ensure that the public accounting profession's reputation for high quality professional services is perpetuated. This proposed SSAE: 1. Would enable the practitioner to report directly to the client his or her conclusion on a specified subject matter, such as internal control, rather than on management's assertion about internal control. 2. Would eliminate the requirement for a separate presentation of management's assertion in certain cases where the assertion is included in the introductory paragraph of the practitioner's report. 3. Would conform the reporting guidance to include reporting elements similar to those required in auditor reports on historical financial statements as contained in SAS No. 58, Reports on Audited Financial Statements (AICPA, Professional Standards, vol. 1, AU sec. 508). 4. Provides guidance on the relationship between the SSAEs and SQCSs. Enabling direct reporting will require amendments to: a. SSAE No. 1, Attestation Standards (AICPA, Professional Standards, vol. 1, AT sec. 100); b. SSAE No. 2, Reporting on an Entity's Internal Control Over Financial Reporting (AICPA, Professional Standards, vol. 1, AT sec. 400); c. SSAE No. 3, Compliance Attestation (AICPA, Professional Standards, vol. 1, AT sec. 500).

ISBN

ed98-06-01t

Publication Date

1998

Relational Format

Book

Keywords

Attest function (Auditing) -- 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), 1998, June 1

Proposed statement on standards for attestation engagements : amendments to Statement on standards for attestation engagements no. 1, Attestation standards, Statement on standards for attestation engagements no. 2, Reporting on an entity's internal control over financial reporting, Statement on standards for attestation engagements no. 3, Compliance attestation;Amendments to Statement on standards for attestation engagements no. 1, Attestation standards, Statement on standards for attestation engagements no. 2, Reporting on an entity's internal control over financial reporting, Statement on standards for attestation engagements no. 3, Compliance attestation

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