Bombness

Audit and Attestation

Spring 2011

Homework 1

20 Points

Refer to the following Audit and Attestation standards to answer the questions below (you may also use your textbook, internet, and any other resource you have). These standards are on Blackboard, and also available for free on the AICPA website.

· AT Section 101 – Attest Engagements.

· AU 110 – Responsibilities and Functions of the Internal Auditor

· AU 150 – Generally Accepted Auditing Standards

· AU 210 – Training and Proficiency

· AU 220 – Independence

· AU 230 – Due Professional Care

For all of the below, please indicate the document(s) and paragraph/section(s) where you found this information.

1. In your own words, describe an Attest engagement. What types of engagements qualify as an Attest Engagement? What is not considered an Attest engagement? (3 Points)

An attest engagement is when an auditor gives an opinion on a way that the company should handle a situation, which then becomes the responsibility of the other party to take into effect. There are many different things that qualify as an attest engagement for example, break-even analyses are attest engagements, internal control systems and processes, physical characteristics of the facilities is also an attest engagement. When an auditor gives a formal opinion and a formal audit of a company this is not an attest engagement, it is now considered and audit service when the financial statements and related financial information are involved. Reference: Page 15-16 in the Auditing textbook.

2. What is an Assertion? Why is this important in Auditing and/or Attestation engagements. ( 2 Points)

An assertion is a positive statement or declaration often without support or reason. This is important in auditing because it is how auditors tell the clients what is positive about their companies financials, and other things that involve the attestation engagements. An assertion is how the auditors get their points across to...