If you find this article helpful, you may wish to read the article titled Accounting, Auditing and Assurance Services.
Attestation Services
Attestation services provide “a report on subject matter, or an assertion about subject matter, that is the responsibility of another party
Statements on Standards for Attestation Engagements (SSAE)
The Auditing Standards Board (ASB), which is part of the American Institute of Certified Public Accountants (AICPA), has issued the Statements on Standards for Attestation Engagements (SSAE) to provide guidelines and rules for CPAs that provide attestation services. These guidelines cover several different areas associated with attestation services. Guidelines include, but are not limited, to areas such as professional requirements, compliance, procedures, documentation, reporting on internal control, and financial forecasts and projections. The SSAE is continuously updated and revised.
Examples of Attestation Services
There are numerous types of attestation services that companies might request. For example, a company that has concerns about possible misstatements of financial information provided by various divisions would want to request attestation services for all of those divisions (Phase 1, 2006). In this scenario, the company should request attestation reports on the financial information recorded for each division. The company should also request attestation reports of the pro forma financial statements.
Another example would be a company that has concerns regarding the various divisions’ internal controls over certain items, such as accounting for inventory or the cash receipt cycle (Phase 1, 2006). That company should request attestation reports on internal controls for all divisions.
Companies may also wish to require attestation services in regard to financial statement supplementary information, inventory quantities, and compliance with GAAP and Sarbanes-Oxley requirements. Each of these items is of great importance, and requesting attestation services in regard to them would be a wise choice.
Preparation for Attestation Services
There are several things that an organizations auditing team can do to prepare for attestation services. The team should gather the financial information for each division of the company, including supporting documentation. Each division’s pro forma financial statements will also need to be gathered. In addition, the team should gather information on the internal controls and procedures for each division. The CPA firm will require the responsible party provide “a written assertion about the effectiveness of internal control” (Messier et al., 2007, p. 834). Additional information that will be needed is support for the assumptions used to prepare financial forecasts and projections, as well as any supplementary information on how these forecasts and projections were prepared. Finally, team members will need to adjust their schedules to ensure availability to work with the auditors while they are performing these services.
Melissa Bushman has published several articles at Associated Content. Please click her name at the top of this page to view her other work.
References
Messier, Jr., W. F., Glover, S. M., & Prawitt, D. F. (2006). “Auditing & Assurance Services: A Systematic Approach.” (4th ed.). New York: McGraw-Hill Irwin.
“Phase 1 course material text.” (2006). Retrieved February 23, 2007, from Colorado Technical University Online website: https://campus.ctuonline.edu/classroom/multimediacoursetext.aspx?classid=74631&tid;=37&uid;=53564&HeaderText;=Course%20Materials:%20ACC365-0701B-01%20:%20Auditing
