AT 101: Attest Engagements

EFFECTIVE DATE AND APPLICABILITY

Original Pronouncements Statement on Standards for Attestation Engagements (SSAE) 10, Attestation Standards: Revision and Recodification, as amended by SSAE 11, January 2002, and SSAE 12.
Effective Date These statements currently are effective.
Applicability Attest engagements, as defined below, are performed by a certified public accountant in the practice of public accounting (practitioner). See AT Section 301, Financial Forecasts and Projections, for additional guidance on applicability when engaged to provide an attest service on a financial forecast or projection.
NOTE: Practitioners performing agreed-upon procedures must follow the general, fieldwork, and reporting standards for attest engagements described in the section, but should refer to AT Section 201 for specific guidance on performing such engagements. When a practitioner accepts an attest engagement for a government body or agency and agrees to follow specified government standards, guides, procedures, statutes, rules, and regulations, the practitioner must follow those governmental requirements as well as the applicable attestation standards.

DEFINITIONS OF TERMS

Assertion. A declaration or set of related declarations about whether the subject matter is based on, or in conformity with, the selected criteria.

NOTE: A conclusion on the reliability of a written assertion may refer to that assertion or to the subject matter to which the assertion relates. However, if there are one or more material deviations from the criteria, the practitioner should modify the report and should ordinarily express his or her conclusion directly on the subject matter, not on management’s assertion.

Attest engagement. An engagement in which 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 the subject matter, that is the responsibility of another party.

NOTE: Professional services that are not covered by this section include the following:
1. Services performed under Statements on Auditing Standards (SASs).
2. Services performed under Statements on Standards for Accounting and Review Services (SSARSs).
3. Services performed under the Statement on Standards for Consulting Services (SSCSs) including litigation services.
4. Engagements to advocate a client’s position, such as representing the client when dealing with the Internal Revenue Service (IRS).
5. Engagements to prepare tax returns or provide tax advice.

Attestation risk. The risk that the practitioner may unknowingly fail to appropriately modify his or her attest report on an assertion that is materially misstated. It consists of the risk (inherent and control risk) that the assertion contains errors that could be material and the risk (detection risk) that the practitioner will not detect such errors.

Criteria. The standards or benchmarks used to measure and present the subject matter and against which the practitioner evaluates the subject matter.

Responsible party. The person or persons (either as individuals or representatives of the entity) responsible for the subject matter. If no such party exists due to the nature of the subject matter, then a party who has a reasonable basis for making a written assertion about the subject matter may provide such an assertion.

Subject matter. Examples of the subject matter of an attest engagement include:

  • Historical or prospective performance or condition, such as prospective financial information, performance measurements, and backlog data
  • Physical characteristics, such as a narrative description or square footage of facilities
  • Historical events, such as the price of a market basket or goods on a certain date
  • Analyses, such as breakeven analyses
  • Systems and processes, such as internal control
  • Behavior, such as corporate governance or compliance with laws and regulations

DEFINING PROFESSIONAL REQUIREMENTS IN STATEMENTS ON STANDARDS FOR ATTESTATION ENGAGEMENTS

SSAE 13 added AT Section 20 to the professional standards, which clarifies that the SSAEs use two categories of professional requirements to describe the degree of responsibility the standards impose on auditors.

  • Unconditional requirements. The practitioner is required to comply with an unconditional requirement in all cases in which the circumstances exist to which the unconditional requirement applies. SSAEs use the words must or is required to indicate an unconditional requirement.
  • Presumptively mandatory requirements. The practitioner also is required to comply with a presumptively mandatory requirement in all cases in which the circumstances exist to which the presumptively mandatory requirement applies; however, in rare circumstances, the practitioner may depart from a presumptively mandatory requirement provided the practitioner documents his or her justification for the departure and how the alternative procedures performed in the circumstances were sufficient to achieve the objectives of the presumptively mandatory requirement. SSAEs use the word should to indicate a presumptively mandatory requirement.

The term “should consider” means that the consideration of the procedure or action is presumptively required, whereas carrying out of the procedure or action is not.

AT Section 20 also clarifies that explanatory material, which is defined within SSAEs, is intended to explain the objective of the professional requirements, rather than imposing a professional requirement for practitioner to perform.

OBJECTIVES OF SECTION 101

At one time, attest services provided by CPAs were limited to expressing a positive opinion on historical financial statements on the basis of an audit made in accordance with generally accepted auditing standards (GAAS). However, CPAs are increasingly requested to provide assurance on representations other than historical financial statements and in forms other than the positive opinion. The main objective of adopting the attestation standards was to provide guidance and establish a broad framework for the variety of attest services demanded of CPAs.

There are eleven attestation standards and two levels of attest assurance that can be reported for general distribution, as follows:

1. Positive assurance in reports that express conclusions on the basis of an examination.
2. Moderate assurance in reports that express conclusions on the basis of a review.

The guidance on attest services also provides for reports based on agreed-upon procedures or agreed-upon criteria, as long as the use of the report is limited to the parties who agreed upon the procedures or criteria.

In 1999, the Auditing Standards Board issued SSAE 9, Amendments to SSAE Nos. 1, 2, and 3. SSAE 9:

  • Provided the option of reporting directly on the subject matter of the assertion, while still permitting practitioners to report on management’s assertion. (The practitioner would continue to be required to obtain management’s assertion as a condition of engagement performance.)
  • Eliminated 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. (This limited approach to direct reporting was modified by SSAE 10.)
  • Conformed the reporting guidance to include reporting elements similar to those required in auditor reports on historical financial statements as contained in Section 508, Reports on Audited Financial Statements.
  • Provided guidance on the relationship between SSAEs and the Statements on Quality Control Standards.

In 2001, the Auditing Standards Board issued SSAE 10, Attestation Standards: Revision and Recodification. SSAE 10 superseded SSAEs 1 through 9 and renumbered the AT sections in the American Institute of Certified Public Accountants’ (AICPA’s) Codification. The primary driver behind the issuance of SSAE 10 was not the need for substantive changes, but the need to make the guidance among attest services more consistent. The revisions to this section included:

  • Changing the title of this section to Attest Engagements
  • Changing the definition of an attest engagement
  • Clarifying that the attestation standards may be applied to a broad range of subject matter
  • Clarifying the relationship between the responsible party, the client (if different from the responsible party), and the practitioner
  • Clarifying that the essential elements of criteria referred to in the third general standard are that the criteria must be suitable, available to users, and the subject matter must be capable of reasonably consistent measurement
  • Providing guidance on restricting the use of the report when a practitioner performs and reports on engagements when written assertion cannot be obtained
  • Permitting true direct reporting on the subject matter (There is no requirement to make reference to an assertion in the practitioner’s report. The practitioner would also be permitted to report on the written assertion.)
  • Expanding guidance on the circumstances in which the use of attest reports should be restricted to specified parties

Additional changes made by SSAE 10 are described in AT Sections 201 to 701.

In 2002, the Auditing Standards Board issued SSAE 11, Attest Documentation. SSAE 11 incorporates in the attestation standards the concepts and terminology in AU Section 339, Audit Documentation. In 2002, SSAE 12, Amendment to Statement on Standards for Attestation Engagements No. 10, Attestation Standards: Revision and Recodification, was issued. SSAE 12 clarifies that although an effective quality control system will assist in complying with attestation standards, deficiencies in or noncompliance with the quality control system does not, by itself, indicate that an engagement was not performed according to the appropriate standards.

FUNDAMENTAL REQUIREMENTS

A practitioner who is engaged to issue or does issue an examination, a review, or an agreed-upon procedures report on subject matter, or an assertion about the subject matter that is the responsibility of another party, should do so in accordance with the eleven attestation standards described later in this section.

Any professional engagement which results in an expression of assurance must be performed under the applicable AICPA standards. Reports issued in connection with other professional standards should be clearly distinguished from attest reports.

An identified responsible party is a prerequisite for an attest engagement. A practitioner may accept an examination, a review, or an agreed-upon procedures engagement on subject matter or a related assertion if one of the following is met:

  • The client is responsible for the subject matter. If, due to the nature of the subject matter, a responsible party does not otherwise exist, then the client must have a reasonable basis for providing a written assertion about the subject matter.
  • If the client is not responsible for the subject matter, then he or she must be able to provide the practitioner, or have a responsible third party provide the practitioner, with evidence of the third party’s responsibility for the subject matter.
NOTE: The practitioner should not take on the role of the responsible party in an attest engagement.

The practitioner should obtain written acknowledgement or other evidence (e.g., reference to legislation, a regulation, or a contract) of the responsible party’s responsibility for the subject matter.

The eleven attestation standards are a natural extension of, but do not supersede, the ten standards in GAAS. Further, they do not supersede existing standards in SASs and SSARSs. The practitioner who is engaged to perform an engagement subject to these existing standards should follow such standards and not look to the eleven attestation standards or the discussion of them in AT Section 101 for guidance.

Attestation Standards

The 11 standards are classified as follows:

General: 1 through 5.

Fieldwork: 6 and 7.

Reporting: 8 through 11.

1. First general standard. The engagement shall be performed by a practitioner who must have adequate technical training and proficiency to perform the attestation engagement. (AT 101.19)
2. Second general standard. The engagement shall be performed by a practitioner who must have adequate knowledge of the subject matter. (AT 101.21)
3. Third general standard. The practitioner must have reason to believe that the subject matter is capable of evaluation against reasonable criteria that are suitable and available to users. (AT 101.23)
a. Suitable criteria must be
(1) Objective—Free from bias.
(2) Measurable—Permit reasonably consistent measurements (qualitative or quantitative) of subject matter. The practitioner should consider whether the criteria are sufficiently precise to permit people having competence in and using the same measurement criterion to be able to obtain materially similar measurements.
(3) Complete—Relevant factors that would alter a conclusion about the subject matter are not omitted.
(4) Relevant—Be relevant to the subject matter.
Criteria issued by a body designated by Council under the AICPA’s Code of Professional Conduct, or issued by regulatory agencies and other bodies composed of experts that follow due-process procedures, are considered suitable. Other criteria that lack authoritative support should be evaluated according to the characteristics described above. Regardless of who establishes the criteria, the responsible party or client is responsible for selecting the criteria. The client is responsible for determining whether the criteria are appropriate for its purpose.
b. The criteria must be available to users in one or more of the following ways:
(1) Publicly
(2) Through inclusion in a clear manner in the presentation of the subject matter or the assertion, or in the practitioner’s report
(3) By being well understood by most users, although not formally available
If the criteria are only available to specified parties, such as the terms of a contract or criteria issued by an industry association and available only to those in the industry, the practitioner’s report should be restricted to parties that have access to the criteria.
4. Fourth general standard. The practitioner must maintain an independence in mental attitude in all matters relating to the engagement. (AT 101.35)
5. Fifth general standard. The practitioner must exercise due professional care in the planning and performance of the engagement and the preparation of the report. (AT 101.39)
6. First standard of fieldwork. The practitioner must adequately plan the work and must properly supervise any assistants. (AT 101.42) Factors to be considered in planning an attest engagement include the following (AT 101.45):
a. The criteria to be used
b. Preliminary judgments about attestation risk and materiality
c. Nature of the subject matter or the items within the assertion that are likely to require revision or adjustment
d. Conditions that may require extension or modification of attest procedures
e. Nature of report (see reporting standards) to be issued
7. Second standard of fieldwork. The practitioner must obtain sufficient evidence to provide a reasonable basis for the conclusion that is expressed in the report. (AT 101.51)
NOTE: The standard also covers engagements designed solely to meet the needs of specified users who have participated in establishing the nature and scope of the engagement (agreed-upon procedures or agreed-upon criteria).
In establishing an appropriate combination of procedures to accumulate evidence and appropriately restrict attestation risk, the practitioner should consider the following:
a. Evidence obtained from sources outside an entity, such as through confirmation, provides greater assurance of an assertion’s reliability than evidence secured solely from within the entity.
b. Information obtained from the attester’s direct personal knowledge, such as through physical examination, observation, computation, operating tests, or inspection, is more persuasive than information obtained indirectly.
c. The more effective the controls over the subject matter, the more assurance they provide about the subject matter or the assertion.
In an attest engagement designed to provide a high level of assurance (an examination), the practitioner should select from all available procedures any combination that can limit attestation risk to an appropriately low level.
In an attest engagement designed to provide a moderate level of assurance (a review), the practitioner’s procedures are ordinarily limited to inquiries and analytical procedures and do not include search and verification procedures, such as confirmation and physical examination.
NOTE: In an attest engagement designed solely to meet the needs of specified parties who have participated in establishing the nature and scope of the engagement, the practitioner is required to perform only those procedures that have been designed or agreed to by the parties.
If the practitioner cannot obtain a written assertion from the responsible party, the practitioner should consider the effects on his or her ability to obtain sufficient evidence to form a conclusion about the subject matter. If the practitioner’s client is the responsible party, the practitioner should ordinarily conclude that a scope limitation exists. If the practitioner’s client is not the responsible party, the practitioner may be able to conclude that he or she has sufficient evidence to form a conclusion about the subject matter.
8. First standard of reporting. The practitioner must identify the subject matter or the assertion being reported on and state the character of the engagement in the report. (AT 101.63) The statement of the character of the attest engagement includes:
a. A description of the nature and scope of the work performed, and
b. A reference to the professional standards governing the engagement (see the “Illustrations” section).
NOTE: When the assertion does not accompany the practitioner’s report, the first paragraph of the report should also contain a statement of the assertion. This requirement would be met by using a hot link within the practitioner’s report to management’s assertion.
9. Second standard of reporting. The practitioner must state the practitioner’s conclusion about the subject matter or the assertion in relation to the criteria against which the subject matter was evaluated in the report. However, if conditions exist that, individually or in combination, result in one or more material deviations from the criteria, the practitioner should modify the report and should ordinarily express his or her conclusion directly on the subject matter, not on the assertion. (AT 101.66)
10. Third standard of reporting. The practitioner must state all of the practitioner’s significant reservations about the engagement, the subject matter, and, if applicable, the assertion related thereto in the report. (AT 101.71)
Reservations about the engagement include unresolved problems that the practitioner had in complying with the attestation, other interpretative standards, or specified agreed-upon procedures.
Reservations about the engagement also include scope limitations. Scope restrictions may require the practitioner:
a. To qualify the assurance provided,
b. To disclaim any assurance, or
c. To withdraw from the examination or review engagement.
Ordinarily, if the scope limit is pervasive or imposed by the client, a disclaimer of opinion or withdrawal is appropriate.
In a review engagement, the review is incomplete and the practitioner should withdraw from the engagement when:
  • The practitioner is unable to perform the necessary inquiry and analytical procedures.
  • The client is the responsible party and does not provide a written assertion.
Reservations about the subject matter or assertion refer to questions about whether the subject matter or assertion is fairly stated, in all material respects, based on established or stated criteria, including adequacy of disclosure. They can result in either qualified or adverse opinions.
Reservations also include questions about measurement, form, arrangement, content or underlying judgments and assumptions applicable to the subject matter or the assertion. Reservations may require modification of the practitioner’s report.
11. Fourth standard of reporting. The practitioner must state in the report that the report is intended solely for the information and use of the specified parties under the following circumstances: (AT 101.78)
  • When the criteria used to evaluate the subject matter are determined by the practitioner to be appropriate only for a limited number of parties who either participated in their establishment or can be presumed to have an adequate understanding of the criteria
  • When the criteria used to evaluate the subject matter are available only to specified parties
  • When reporting on subject matter and a written assertion has not been provided by the responsible party
  • When the report is on an attestation engagement to apply agreed-upon procedures to the subject matter
A number of circumstances may affect the need to restrict a report, including
  • The purpose of the report
  • The criteria used in preparation of the subject matter
  • The extent to which the procedures performed are known or understood
  • The potential for the report to be misunderstood when taken out of context
Although a practitioner should consider informing the client that restricted-use reports are not intended for distribution to nonspecified parties, regardless of whether they are included in a document containing a separate general-use report, a practitioner is not responsible for controlling a client’s distribution of restricted-use reports.
Restricted-use reports should contain:
a. A statement indicating that the report is intended solely for the information and use of the specified parties
b. An identification of the specified parties to whom use is restricted
c. A statement that the report is not intended to be and should not be used by anyone other than these specified parties
NOTE: A practitioner may restrict the use of any report.
If a practitioner issues a single combined report covering both subject matter or presentations that require restrictions and those that do not require restrictions, the use of a single combined report should be restricted to the specified parties.
If a separate restricted-use report is included in a document that contains a general-use report, this does not affect the intended use of either report (i.e., the restricted-use report remains restricted and the general-use report continues to be for general use).

Examination Reports

In an attest engagement designed to achieve a high level of assurance (an examination), the practitioner’s conclusion should be expressed in the form of an opinion (see “Illustrations: Examination Reports”).

The practitioner should clearly state, in his opinion, whether (1) the subject matter is based on (or in conformity with) the criteria, in all material respects, or (2) the assertion is presented (or fairly stated), in all material respects, based on the criteria. Reports may be qualified or modified because of the subject matter, the assertion, or the engagement. Reports also may emphasize certain matters relating to the engagement.

The form of the practitioner’s report depends on whether the practitioner’s opinion is on the subject matter or assertion. According to AT 101.85, the practitioner’s examination report on subject matter should include the following:

  • A title that includes the word independent
  • An identification of the subject matter and the responsible party
  • Statements that:
    • The subject matter is the responsibility of the responsible party.
    • The practitioner’s responsibility is to express an opinion on the subject matter based on his or her examination.
    • The examination was conducted in accordance with attestation standards established by the AICPA, and accordingly, included procedures that the practitioner considered necessary in the circumstances.
    • The practitioner believes the examination provides a reasonable basis for his or her opinion.
  • The practitioner’s opinion on whether the subject matter is based on (or in conformity with) the criteria in all material respects
  • A statement restricting the use of the report to specified parties when the criteria used to evaluate the subject matter are determined to be appropriate only for a limited number of parties who understand the criteria, or when such criteria are available only to the specified parties; the report should also be restricted when a written assertion has not been provided by the responsible party, and a statement to that effect should be included in the introductory paragraph
  • The manual or printed signature of the practitioner’s firm
  • The date of the examination report

Under AT 101.86, the practitioner’s examination report on an assertion should include the following:

  • A title that includes the word independent
  • An identification of the assertion and the responsible party (when the assertion does not accompany the practitioner’s report, the first paragraph of the report should also contain a statement of the assertion)
  • Statements that:
    • The assertion is the responsibility of the responsible party
    • The practitioner’s responsibility is to express an opinion on the assertion based on his or her examination
    • The examination was conducted in accordance with attestation standards established by the AICPA, and accordingly, included procedures that the practitioner considered necessary in the circumstances
    • The practitioner believes the examination provides a reasonable basis for his or her opinion
  • The practitioner’s opinion on whether the assertion is presented (or fairly stated), in all material respects, based on the criteria
  • A statement restricting the use of the report to specified parties when the criteria used to evaluate the subject matter are appropriate only for a limited number of parties who understand the criteria, or when such criteria are available only to the specified parties
  • The manual or printed signature of the practitioner’s firm
  • The date of the examination report

The practitioner is not precluded from examining an assertion but opining directly on the subject matter.

Review Reports

In an attest engagement designed to achieve only a moderate level of assurance (a review), the practitioner’s conclusion should be expressed in the form of negative assurance (see “Illustrations: Review Reports”). The practitioner should state whether any information came to his or her attention that indicated (1) the subject matter is not based on (or in conformity with) the criteria or (2) the assertion is not presented in all material respects based on established or stated criteria.

According to AT 101.89 the practitioner’s review report on subject matter should include:

  • A title that includes the word independent
  • An identification of the subject matter and the responsible party
  • Statements that:
    • The subject matter is the responsibility of the responsible party.
    • The review was conducted in accordance with attestation standards established by AICPA.
    • A review is substantially less in scope than an examination, the objective of which is an expression of opinion on the subject matter, and accordingly, no such opinion is expressed.
  • A statement about whether the practitioner is aware of any material modifications that should be made to the subject matter in order for it to be based on (or in conformity with), in all material respects, the criteria, other than those modifications, if any, indicated in his or her report.
  • A statement restricting the use of the report to specified parties when the criteria used to evaluate the subject matter are appropriate only for a limited number of parties who understand the criteria, or when such criteria are available only to the specified parties. The report should also be restricted when a written assertion has not been provided by the responsible party, and a statement to that effect should be included in the introductory paragraph.
  • The manual or printed signature of the practitioner’s firm.
  • The date of the examination report.

Under AT 101.90 the practitioner’s review report on an assertion should include the following:

  • A title that includes the word independent
  • An identification of the assertion and the responsible party (when the assertion does not accompany the practitioner’s report, the first paragraph of the report should also contain a statement of the assertion)
  • Statements that:
    • The assertion is the responsibility of the responsible party.
    • The review was conducted in accordance with attestation standards established by AICPA.
    • A review is substantially less in scope than an examination, the objective of which is an expression of opinion on the assertion, and accordingly, no such opinion is expressed.
  • A statement about whether the practitioner is aware of any material modifications that should be made to the assertion in order for it to be presented (or fairly stated), in all material respects, based on (or in conformity with) the criteria, other than those modifications, if any, indicated in his or her report
  • A statement restricting the use of the report to specified parties when the criteria used to evaluate the subject matter are appropriate only for a limited number of parties who understand the criteria, or when such criteria are available only to the specified parties
  • The manual or printed signature of the practitioner’s firm
  • The date of the review report

Relationship to Quality Control Standards

Attestation and quality control standards are related, since attestation standards relate to the conduct of individual attest engagements and quality control standards relate to the firm’s whole attest practice. The quality control policies and procedures that a firm adopts may affect both the conduct of individual attest engagements and the conduct of a firm’s attest practice as a whole. Therefore, SSAE 10 requires firms to adopt a system of quality control in the conduct of their attest practice. However, deficiencies in or noncompliance with the quality control system does not, by itself, indicate that an engagement was not performed according to the appropriate standards.

Attest Documentation

The practitioner should prepare and maintain documentation of the attest engagement. The form and content of the attest documentation will depend on the particular engagement’s circumstances. The practitioner should use professional judgment in determining the quantity, type, and content of attest documentation.

Attest documentation is the principal record of the procedures applied, information obtained, and conclusions or findings reached by the practitioner. It serves to provide the primary support for the practitioner’s report and assist in the conduct and supervision of the engagement. It should be sufficient to:

  • Allow members of the engagement team with supervisory and review responsibilities to understand the nature, timing, extent, and results of attest procedures performed, and the information obtained, and
  • Indicate which engagement team members performed and reviewed the work.

Attest documentation, which may be in paper or electronic form, includes work programs, analyses, memoranda, letters of confirmation and representation, abstracts or copies of the entity’s documents, and schedules or commentaries prepared or obtained by the practitioner.

The practitioner owns the attest documentation, and some states recognize this right of ownership in their statutes. However, the practitioner has an ethical, and sometimes legal, obligation to maintain the confidentiality of the client or responsible party. The practitioner should adopt reasonable procedures to maintain the confidentiality of information contained in the attest documentation and to prevent unauthorized access to that documentation. The practitioner should also retain the attest documentation for a period sufficient to meet the needs of his or her practice, and to satisfy any pertinent legal or regulatory requirements for records retention. (The practitioner should be able to access electronic documentation throughout the retention period.)

Sometimes attest documentation may serve as a source of reference for the client, but such documentation should not be considered as part of, or a substitute for, the client’s accounting records.

When performing an examination of prospective financial statements, attest documentation ordinarily should indicate that the practitioner considered the process by which the entity develops its prospective financial statements in determining the scope of the engagement.

NOTE: Although the requirement to maintain attest documentation is stated in SSAE 10, changes have been made by SSAE 11, which reflect the concepts and terms used in SAS 96.

Establishing an Understanding with the Client

According to AT 101.46, the practitioner should establish an understanding with the client on the services to be performed for each engagement that includes:

1. The objectives of the engagement
2. Management’s responsibilities
3. Practitioner’s responsibilities
4. Limitations of the engagement

The understanding should be documented, preferably through a written communication with the client. If the practitioner believes that an understanding has not been established, he or she should not accept the engagement.

Representation Letter

In an examination or review engagement, a practitioner should consider obtaining a representation letter from the responsible party. According to AU 101.60, examples of representations that may be included are:

  • A statement acknowledging responsibility for the subject matter and the assertion (if applicable)
  • A statement acknowledging responsibility for selecting the criteria (if applicable)
  • A statement acknowledging responsibility for determining that such criteria are appropriate for its purposes, where the responsible party is the client
  • The assertion about the subject matter based on the selected criteria
  • A statement that all known matters contradicting the assertion and any communication from regulatory agencies affecting the subject matter or the assertion have been disclosed to the practitioner
  • Availability of all records relevant to the subject matter
  • A statement that any known events subsequent to the period (or point in time) of the subject matter being reported on that would have a material effect on the subject matter (or assertion, if applicable) have been disclosed to the practitioner

If the client is not the responsible party, the practitioner should consider obtaining a representation letter from the client. According to AU 101.61, examples of representations included in the letter are:

  • A statement that any known material subsequent events have been disclosed
  • A statement acknowledging the client’s responsibility for selecting the criteria, if applicable
  • A statement acknowledging the client’s responsibility for determining that such criteria are appropriate

If the responsible party or client refuses to furnish necessary written representations in an examination engagement, the practitioner should consider the impact on the ability to issue a conclusion about the subject matter. If the representation is necessary to obtain sufficient evidence to issue a report, the responsible party or client’s refusal may cause the practitioner to disclaim an opinion or withdraw. However, in other circumstances, a qualified opinion may be appropriate. The practitioner should also consider whether the refusal affects his or her ability to rely on other representations.

If the engagement is a review and a scope limitation exists, the practitioner should withdraw from the engagement.

NOTE: Written representations are part of the evidential matter that the practitioner obtains.

Other Information in a Client-Prepared Document Containing the Practitioner’s Attest Report

A practitioner’s report may appear in:

  • Annual reports to holders of securities or beneficial interests
  • Annual reports of organizations for charitable or philanthropic purposes
  • Annual reports filed with regulatory authorities under the Securities Exchange Act of 1934
  • Other documents to which the practitioner, at the client’s request, devotes attention

In this case, the auditor should do the following:

1. Read the other information.
NOTE: This is the knowledgeable study of information by an auditor who has an understanding of the client’s business, organization, and operating characteristics, as well as its financial characteristics.
2. Consider whether the other information is materially inconsistent with information in the audited financial statements. This consideration includes the manner of presentation of both the other information and comparable information in the financial statements.
3. If there is a material inconsistency:
a. Determine whether the financial statements, the report, or both require revision.
NOTE: This means the auditor should decide if the difference is caused by a misstatement in the financial statements.
b. Request that the client revise the other information if it, rather than the financial statements, is misstated.
c. If the other information is not revised, consider other actions such as:
(1) Revising the report to include an explanatory paragraph describing the material inconsistency
(2) Withholding the use of the report in the document
(3) Withdrawing from the engagement
4. If the auditor’s reading makes him or her aware of a material misstatement of fact, he or she should:
a. Discuss the matter with the client.
b. Consider that:
(1) He or she may not have the expertise to assess the validity of the statement.
(2) There may be no standards by which to assess its presentation.
(3) There may be valid differences of judgment or opinion.
NOTE: This means that concluding there is a material misstatement is much more subjective than concluding there is a material inconsistency.
c. Request that the client seek the advice of legal counsel on the matter.
d. If the auditor concludes after discussion with the client that there is, in fact, a material misstatement of fact, he or she should consider steps such as:
(1) Notifying the client in writing of his or her views
(2) Consulting his or her own legal counsel on what other action is appropriate

Subsequent Events

Subsequent events are events or transactions that occur after the point in time or period of time of the subject matter being tested but not before the date of the practitioner’s report that have a material effect on the subject matter and therefore require adjustment or disclosure in the financial statements.

The two types of events that a practitioner must consider include:

1. Events that provide additional evidence about conditions that existed at the point in time or during the period of time of the subject matter being tested. The practitioner should use this information in considering whether the subject matter is presented in conformity with the criteria and may affect the presentation of the subject matter, the assertion, or the practitioner’s report.
2. Events that provide evidence about conditions that arose after the point in time or period of time of the subject matter being tested that need to be disclosed to keep the subject matter from being misleading. This type of subsequent event will not normally affect the practitioner’s report if the information is disclosed.

The practitioner is not responsible for to detecting subsequent events. However, the practitioner should ask the responsible party if they are aware of any subsequent events through the date of the practitioner’s report that would have a material effect on the subject matter or assertion. If a representation letter is obtained, the letter should include a representation concerning subsequent events.

If the practitioner subsequently becomes aware of conditions that existed at the date of the practitioner’s report that might have affected the report had the practitioner been aware of them, the practitioner should consider the guidance in Section 561, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report.

COMPARISON OF ATTESTATION STANDARDS WITH GAAS

Following is a table that compares attestation standards with GAAS.

Attestation Standards GAAS
General Standards
1. The engagement shall be performed by a practitioner having adequate technical training and proficiency in the attest function. 1. The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor.
2. The engagement shall be performed by a practitioner having adequate knowledge of the subject matter.
3. The practitioner shall perform the engagement only if he or she has reason to believe that the subject matter is capable of evaluation against criteria that are suitable and available to users.
4. In all matters relating to the engagement, an independence in mental attitude shall be maintained by the practitioner. 2. In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors.
5. Due professional care shall be exercised in the planning and performance of the engagement. 3. Due professional care is to be exercised in the performance of the audit and the preparation of the report.
Standards of Fieldwork
1. The work shall be adequately planned and assistants, if any, shall be properly supervised. 1. The work is to be adequately planned and assistants, if any, are to be properly supervised.
2. A sufficient understanding of internal control is to be obtained to plan the audit and to determine the nature, timing, and extent of tests to be performed.
2. Sufficient evidence shall be obtained to provide a reasonable basis for the conclusion that is expressed in the report. 3. Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit.
Standards of Reporting
1. The report shall identify the subject matter or the assertion being reported on and state the character of the engagement.
2. The report shall state the practitioner’s conclusion about the subject matter or the assertion in relation to the criteria against which the subject matter was evaluated. 1. The report shall state whether the financial statements are presented in accordance with GAAP.
2. The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.
3. Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated in the report.
3. The report shall state all of the practitioner’s significant reservations about the engagement, the subject matter, and if applicable, the assertion related thereto. 4. The report shall either contain an expression of opinion regarding the financial statements taken as a whole, or an assertion to the effect that an opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefore should be stated. In all cases where an auditor’s name is associated with financial statements, the report should contain a clear-cut indication of the character of the auditor’s work, if any, and the degree of responsibility he or she is taking.
4. The report shall state that the use of the report is restricted to specified parties under the following circumstances:
  • When the criteria used to evaluate the subject matter are determined by the practitioner to be appropriate only for a limited number of parties who either participated in their establishment or can be presumed to have an adequate understanding of the criteria.
  • When the criteria used to evaluate the subject matter are available only to specified parties.
  • When reporting on subject matter and a written assertion has not been provided by the responsible party.
  • When the report is on an attest engagement to apply agreed-upon procedures to the subject matter.

INTERPRETATIONS

Defense Industry Questionnaire on Business Ethics and Conduct (Issued August 1987; Amended February 1989; Modified May 1989; Revised January 2001; Revised November 2006)

This interpretation provides detailed guidance to a practitioner engaged to examine or review a defense contractor’s responses to a questionnaire related to principles of business ethics and conduct adopted by certain companies in the defense industry.

Responding to Requests for Reports on Matters Relating to Solvency (Issued May 1988; Amended February 1993; Revised January 2001; Revised November 2006)

An accountant should not provide any form of assurance, through examination, review, or agreed-upon procedures, that an entity:

1. Is not insolvent at the time debt is incurred or would not be rendered insolvent thereby
2. Does not have unreasonably small capital
3. Has the ability to pay its debts as they mature

An accountant may provide a client with various professional services that might be useful to a client in connection with a financing, but the scope of services and form of report have to conform to the requirements of the relevant professional standards.

If an accountant reports on the results of applying agreed-upon procedures, in addition to the normal requirements, the report should make clear that no representations are provided on questions of legal interpretation and no assurance is provided concerning the borrower’s solvency, adequacy of capital, or ability to pay its debts.

Applicability of Attestation Standards to Litigation Services (July 1990; Revised January 2001)

Attestation standards do not apply to litigation services unless the practitioner has been specifically engaged to express a written conclusion about the reliability of a written assertion that is the responsibility of another party and that conclusion and assertion are for the use of others who, under the rules of the proceedings, do not have an opportunity to analyze and challenge such work. The attestation standards would apply if the practitioner is specifically requested by a litigant to issue an attestation services report.

A practitioner is not prohibited from providing expert testimony on matters relating to solvency. The prohibition on providing written reports related to solvency does not apply in a legal forum in which the legal definition and interpretation of matters relating to solvency can be analyzed and challenged by the opposing party.

Providing Access to, or Photocopies of, Working Papers to a Regulator (May 1996; Revised January 2001; Revised January 2002)

A regulator’s request for access to or photocopies of working papers in an attestation engagement should be treated in the same manner as a request related to audit working papers (see Section 339).

Attest Engagements on Financial Information Included in XBRL Instance Documents (September 2003)

NOTE: This interpretation was issued after the date that the PCAOB issued Release No. 2003-006, which recognized AICPA standards as interim transitional standards. Therefore, this guidance is not considered authoritative for practitioners with public company clients.

This interpretation provides guidance on the practitioner’s considerations when he or she is engaged to examine and report on whether an Instance Document accurately reflects underlying financial information. (XBRL is the business reporting part of Extensible Markup Language [XML], a freely licensable open technology standard, which makes it possible to store and transfer data. An entity’s financial information is made available in XBRL in a machine-readable format called an “Instance Document,” which can then be distributed electronically through e-mail, on a website, etc.)

The practitioner should first make sure that the subject matter is capable of evaluation against suitable and available criteria. Two criteria, XBRL taxonomies and XBRL International Technical Specifications, meet these criteria. Some entities may create their own taxonomies, which the practitioner must evaluate to determine if they are “suitable and available.”

The interpretation offers examples of procedures that the practitioner should consider performing to obtain sufficient evidential matter to form an opinion, such as:

  • Comparing the rendered (i.e., converted from machine language) Instance Document to the financial information
  • Tracing and agreeing the Instance Document’s tagged information to the financial information
  • Testing that the financial information is tagged and included in the Instance Document
  • Testing that tagging is consistent
  • Testing that extension or custom taxonomy meets the XBRL International Technical Specification

When reporting on such an engagement, the practitioner should note whether the underlying financial information has been audited or reviewed. If so, reference to the audit or review should be made. If not, the practitioner should disclaim an opinion on the underlying financial information. If there is information in the Instance Document not covered by the practitioner’s report, it should be clearly identified.

Examples of reports for these types of engagements are show in Examination Reports Illustrations 8 and 9.

Reporting on Attestation Engagements Performed in Accordance with Government Auditing Standards (December 2004; Revised January 2008)

When an auditor performs an attestation engagement in accordance with generally accepted government auditing standards, the scope paragraph of the report should be modified to indicate that the work was “conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States.”

Reporting on the Design of Internal Control (December 2008)

The auditor cannot report on the suitability of the design of an entity’s internal control, based on the risk assessment procedures performed to gain an understanding of the entity and its environment, since these procedures do not provide a sufficient basis of information to make such a report.

If the auditor is asked to sign a prescribed form developed by the party to whom the reports are to be submitted regarding the design of an entity’s internal controls, the auditor should either revise the form or attach a separate report that conforms to the auditor’s professional standards.

The auditor should not submit a report about an entity’s ability to establish suitable internal controls.

Including a Description of Tests of Controls or Other Procedures, and the Results Thereof, in an Examination Report (July 2010)

The circumstances of a specific engagement are relevant to a practitioner’s consideration of whether to include a description of tests of controls or other procedures performed, as well as the results of those tests, in the examination report. The practitioner should consider the following when determining whether to include this description:

  • Whether there has been a request for this information
  • Whether there is a business need for requesting it
  • Whether report recipients have sufficient knowledge of the engagement to understand the description
  • Whether including the description in the report will cause a misunderstanding of the opinion
  • Whether tests of controls or other procedures by the practitioner directly relate to the engagement

Adding this description to the report may increase the need to restrict the use of the report to specific parties.

ILLUSTRATIONS: EXAMINATION REPORTS

These illustrations are adapted from SSAE 10.

Illustration 1. Standard Examination Report on Subject Matter for General Use
This report pertains to subject matter for which suitable criteria exist and are available to all users through inclusion in a clear manner in the presentation of the subject matter. A written assertion has been obtained from the responsible party.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have examined the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1. Widget Company’s management is responsible for the schedule of investment returns. Our responsibility is to express an opinion on this statement 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 Widget Company’s schedule of investment returns and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
[Additional paragraph(s) may be added to emphasize certain matters relating to the attest engagement or the subject matter.]
In our opinion, the schedule referred to above presents, in all material respects, the investment returns of Widget Company for the year ended December 31, 20X1, based on the [XXX] criteria set forth in Note 1.
Smith and Jones
February 15, 20X2
Illustration 2. Standard Examination Report on an Assertion for General Use
This report pertains to subject matter for which suitable criteria exist and are available to all users through inclusion in a clear manner in the presentation of the subject matter. A written assertion has been obtained from the responsible party.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have examined management’s assertion that the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1, is presented in accordance with [XXX] criteria set forth in Note 1. Widget Company’s management is responsible for the assertion. Our responsibility is to express an opinion on the assertion 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 management’s assertions and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
[Additional paragraph(s) may be added to emphasize certain matters relating to the attest engagement or the assertion.]
In our opinion, management’s assertion referred to above is fairly stated, in all material respects, based on the [XXX] criteria set forth in Note 1.
Smith and Jones
February 15, 20X2
Illustration 3. Examination Report for General Use
The introductory paragraph states the practitioner has examined management’s assertion, but the practitioner opines directly on the subject matter. The report pertains to subject matter for which suitable criteria exist and are available to all users through inclusion in a clear manner in the presentation of the subject matter. A written assertion has been obtained from the responsible party.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have examined management’s assertion that the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1, is presented in accordance with the [XXX] criteria set forth in Note 1. Widget Company’s management is responsible for the assertion. Our responsibility is to express an opinion on this statement 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 Widget Company’s schedule of investment returns and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
[Additional paragraph(s) may be added to emphasize certain matters relating to the attest engagement or the assertion.]
In our opinion, the schedule referred to above presents, in all material respects, the investment returns of Widget Company for the year ended December 31, 20X1, based on the [XXX] criteria set forth in Note 1.
Smith and Jones
February 15, 20X2
Illustration 4. Examination Report on Subject Matter; Use of Report Restricted
In this example, use of the report is restricted because although suitable criteria exist, the criteria are available only to specified parties. A written assertion has been obtained from the responsible party.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have examined the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1. Widget Company’s management is responsible for the schedule of investment returns. Our responsibility is to express an opinion on this statement 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 Widget Company’s schedule of investment returns and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
[Additional paragraph(s) may be added to emphasize certain matters relating to the attest engagement or the assertion.]
In our opinion, the schedule referred to above presents, in all material respects, the investment returns of Widget Company for the year ended December 31, 20X1, based on the criteria referred to in the investment management agreement between Widget Company and Basic Investment Managers, Ltd., dated November 15, 20X1.
This report is intended solely for the information and use of Widget Company and Basic Investment Managers, Ltd. and is not intended to be and should not be used by anyone other than these specified parties.
Smith and Jones
February 15, 20X2
Illustration 5. Examination Report: Qualified Opinion
In this example, the opinion is qualified because conditions exist that, individually or in combination, result in one or more material misstatements or deviations from the criteria. The report is for general use and pertains to subject matter for which suitable criteria exist and are available to all users through inclusion in a clear manner in the presentation of the subject matter. A written assertion has been obtained from the responsible party.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have examined the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1. Widget Company’s management is responsible for the schedule of investment returns. Our responsibility is to express an opinion 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 Widget Company’s schedule of investment returns and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
Our examination disclosed the following [describe condition(s) that, individually or in the aggregate, resulted in a material misstatement or deviation from the criteria].
In our opinion, except for the material misstatement (or deviation from the criteria) described in the preceding paragraph, the schedule referred to above presents, in all material respects, the investment returns of Widget Company for the year ended December 31, 20X1, based on the [XXX] criteria set forth in Note 1.
Smith and Jones
February 15, 20X2
Illustration 6. Examination Report: Disclaimer of Opinion
This example illustrates a disclaimer of opinion because of a scope restriction. The report pertains to subject matter for which suitable criteria exist and are available to all users through inclusion in a clear manner in the presentation of the subject matter.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We were engaged to examine the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1. Widget Company’s management is responsible for the schedule of investment returns.
Because of the restriction on the scope of our examination discussed in the preceding paragraph, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on whether the schedule referred to above presents, in all material respects, the investment returns of Widget Company for the year ended December 31, 20X1, based on the [XXX] criteria set forth in Note 1.
Smith and Jones
February 15, 20X2
NOTE: The scope paragraph should be omitted, and paragraphs describing the scope restrictions should be included.
Illustration 7. Examination Report: Subject Matter Is the Responsibility of a Party Other Than the Client
In this example, the report is restricted as to use, since a written assertion has not been provided by the responsible party. The subject matter pertains to criteria that are suitable and are available to the client.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have examined the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1. Widget Company’s management is responsible for the schedule of investment returns. Widget management did not provide us a written assertion about their schedule of investment returns for the year ended December 31, 20X1. Our responsibility is to express an opinion 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 Widget Company’s schedule of investment returns and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
[Additional paragraph(s) may be added to emphasize certain matters relating to the attest engagement or the subject matter.]
In our opinion, the schedule referred to above presents, in all material respects, the investment returns of Widget Company for the year ended December 31, 20X1, based on the [XXX] criteria set forth in Note 1.
This report is intended solely for the information and use of the management and the board of directors of Widget Company and is not intended to be and should not be used by anyone other than these specified parties.
Smith and Jones
February 15, 20X2
Illustration 8. Examination Report on Subject Matter for an Engagement on Financial Information Included in an Xbrl Instance Document
The following illustration, adapted from an interpretation of AT 101, assumes that the underlying financial information was audited by the practitioner.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have examined the accompanying XBRL Instance Document of Widget Company that reflects the data presented in the financial statements of Widget Company as of December 31, 20X1, and for the year then ended. Widget Company’s management is responsible for the XBRL Instance Document. Our responsibility is to express an opinion based on our examination.
We have also audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of Widget Company as of December 31, 20X1, and for the year then ended, and in our report dated February 15, 20X2, we expressed an unqualified opinion on those financial statements. [If the report is other than unqualified, disclose this and the reasons behind the modified opinion.]
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 XBRL Instance Document 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 XBRL Instance Document of Widget Company referred to above accurately reflects, in all material respects, the data presented in the financial statements in conformity with the [identify criteria].
Smith and Jones
February 15, 20X2
Illustration 9. Examination Report on Management’s Assertions for an Engagement on Financial Information Included in an Xbrl Instance Document
The following illustration, adapted from an interpretation of AT 101, assumes that the underlying financial information was audited by the practitioner.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have examined management’s assertion that the accompanying XBRL Instance Document accurately reflects the data presented in the financial statements of Widget Company as of December 31, 20X1 and for the year then ended in conformity with XBRL U.S. Consumer and Industrial Taxonomy and the XBRL International Technical Specifications 2.0. Widget Company’s management is responsible for the assertion. Our responsibility is to express an opinion on the assertion based on our examination.
We have also audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of Widget Company as of December 31, 20X1, and for the year then ended; in our report dated February 15, 20X2, we expressed an unqualified opinion on those financial statements.
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 XBRL Instance Document 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, management’s assertion referred to above is fairly stated, in all material respects, in conformity with XBRL U.S. Consumer and Industrial Taxonomy and the XBRL International Technical Specifications 2.0.
Smith and Jones
February 15, 20X2

ILLUSTRATIONS: REVIEW REPORTS

These illustrations are adapted from SSAE 10.

Illustration 1. Standard Review Report on Subject Matter for General Use
This report pertains to subject matter for which suitable criteria exist and are available to all users through inclusion in a clear manner in the presentation of the subject matter. A written assertion has been obtained from the responsible party.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have reviewed the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1. Widget Company’s management is responsible for the schedule of investment returns.
Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on Widget Company’s schedule of investment returns. Accordingly, we do not express such an opinion.
[Additional paragraph(s) may be added to emphasize certain matters relating to the attest engagement or the subject matter.]
Based on our review, nothing came to our attention that caused us to believe that the schedule of investment returns of Widget Company for the year ended December 31, 20X1, is not presented, in all material respects, in conformity with the [XXX] criteria set forth in Note 1.
Smith and Jones
February 15, 20X2
Illustration 2. Review Report: Subject Matter Is the Responsibility of a Party Other Than the Client
This review report is restricted as to use since a written assertion has not been provided by the responsible party. The subject matter pertains to criteria that are suitable and are available to the client.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have reviewed the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1. Widget Company’s management is responsible for the schedule of investment returns. Widget Company’s management did not provide us a written assertion about their schedule of investment returns for the year ended December 31, 20X1.
Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on Widget Company’s schedule of investment returns. Accordingly, we do not express such an opinion.
[Additional paragraph(s) may be added to emphasize certain matters relating to the attest engagement or the subject matter.]
Based on our review, nothing came to our attention that caused us to believe that the schedule of investment returns of Widget Company for the year ended December 31, 20X1, is not presented, in all material respects, in conformity with the [XXX] criteria set forth in Note 1.
This report is intended solely for the information and use of the management and the board of directors of Widget Company and is not intended to be and should not be used by anyone other than these specified parties.
Smith and Jones
February 15, 20X2
Illustration 3. Review Report on an Assertion
Although suitable criteria exist for the subject matter, the report is restricted since the criteria are available only to specified parties. A written assertion has been obtained from the responsible party.
Independent Accountant’s Report
To the Board of Directors
Widget Company
Main City, USA
We have reviewed management’s assertion that the accompanying schedule of investment returns of Widget Company for the year ended December 31, 20X1, is presented in accordance with the [XXX] criteria referred to in Note 1. Widget Company’s management is responsible for the assertion.
Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management’s opinion. Accordingly, we do not express such an opinion.
[Additional paragraph(s) may be added to emphasize certain matters relating to the attest engagement or the assertion.]
Based on our review, nothing came to our attention that caused us to believe that management’s assertion referred to above is not fairly stated, in all material respects, based on the [XXX] criteria referred to in the investment management agreement between Widget Company and Basic Investment Managers, Ltd., dated November 15, 20X1.
This report is intended solely for the information and use of Widget Company and Basic Investment Managers, Ltd. and is not intended to be and should not be used by anyone other than these specified parties.
Smith and Jones
February 15, 20X2
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