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Canada (162,427)
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Chapter 3

Chapter 3 - Reports on Audited Financial Statements.docx

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Course Code
ACCT 3280

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Chapter 3Reports on Audited Financial Statements The Association FrameworkAssociationterm used within the profession to indicate a public accountants involvement with an enterprise or with info issued by that enterpriseAssociation can arise in 3 ways though some action PA associates himself w info issued by enterprise without PAs knowledgeor consent enterprise indicates that the PA was involved rdwith info issued by them 3 part assumes PA is involved with info issued by an enterpriseAssociated with information PAs responsibilities include 1 Applicable standards in the CICA handbook must be met 2 The PA complies with their provincial institutes rule of professional conduct 3 There is appropriate communication of the extent of their involvement with the information 4 PA ensure that the info they are associated with it accurate accurately reproduced and not misleadingIf client makes attempt to make inappropriate use of his name PA should amend the information or get legal advice Association with financial statementsAuditing standards require a report in all cases were a PAs name is associated with financial statementsAssociated with financial statements when you have consented to use of your name in connection with them or have prepared or performed some other service with respect to them even if your name is not used in any written reportWith respect to financial statements PA is associated with them when these are merely reproduced on their letterhead theyre produced by their computer as part of a bookkeeping service or a document containing financial statements merely identifies them as the public accountant or auditor for the companyReport is required in cases of association bc most users of financial statements will assume that an audit has been conducted and that everything is OK on basis of the involvementLevels of assuranceaccountants and auditors can render 3 types of conclusions or levels of assurance 1 Positive assurancehighest level of assurance is the standard unqualified report Often referred to as the clean opinion reasonable or high assurance 2 Negative assurancemiddle level of assurance also referred to as moderate assurance and is typical in the review report of unaudited financial statements Called negative bc it uses the backdoor phrase to come to my attention to give assurance about conformity with GAAP 3 No assurancelowest level of assurance most common examples are compilation engagements and specified procedures engagements
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