PROCEDURESANDREPORTSONSPECIALPURPOSE
AUDITENGAGEMENTS
Questions
1.
The report simply states: The financial statements are not intended to be
presented in conformity with financial reporting standards. The opinion
expression thereafter refers to a description of the comprehensive basis used.
Non-PFRS accounting bases include:
2.
3.
1.
2.
3.
4.
5.
The following are four comprehensive bases of accounting other than PFRS:
1.
2.
3.
The cash receipts and disbursements basis of accounting (cash basis) and
modifications to the cash basis, such as recording depreciation on fixed
assets or accruing income tax.
4.
29-2
4.
29-3
b
a
c
a
5.
6.
7.
8.
b
a
a
a
9.
10.
11.
12.
a
a
d
d
13.
14.
15.
16.
d
a
a
a
17.
18.
19.
20.
b
c
b
a
Cases
1.
To the Board of Directors of Neiny Ltd.:
We have reviewed the accompanying statement of financial position of
Neiny Ltd. as of December 31, 2014, and the related statements of
income, retained earnings, and cash flows for the year then ended, in
accordance with standards established by the Auditing Standards and
Practices Council. All information included in these financial statements is
the representation of the management of Neiny Ltd.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an examination in accordance with auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying 2014 financial statements in order
for them to be in conformity with financial reporting standards.
The financial statements for the year ended December 31, 2013, were
audited by us, and we expressed an unqualified opinion on them in our
report dated February 27, 2014, but we have not performed any auditing
procedures since that date.
Modelle & Co.
March 3, 2016
2.
a.
The assertions that are incorrect and should otherwise be deleted are the
following:
1. Report should be addressed to Ms. Clean Corporations Board of
Directors.
2. Delete the entire paragraph describing the scope except for the
reference to cash in banks and accounts receivable.
29-4
The assertions that are missing and should be inserted are the following:
1. Date of the report.
2. Statement limiting the distribution of the report to Ms. Cleans
management.
3. Description of the procedures performed.
4. Statement that the agreed-upon procedures applied are not adequate to
constitute a PSA audit.
5. Description of the accountants findings.
6. Disclaimer of an opinion concerning cash in banks and accounts
receivable.
7. Statement limiting the report only to cash in banks and accounts
receivable and indicating that the report does not extend to the
financials taken as a whole.
3.
Independent Auditors Report
[Addressee]
We have audited the statement of assets, liabilities, and capital (income
tax [cash] basis) of Vanda & Corona, a partnership, as of December 31,
2014, and the related statements of revenue and expenses (income tax
[cash] basis) and statement of changes in partners capital accounts
(income tax [cash] basis) for the year then ended. These financial
statements are the responsibility of the companys management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
As described in Note X, the partnerships policy is to prepare its financial
statements on the accounting basis used for income tax purposes;
consequently, certain revenue and related assets are recognized when
received rather than when earned, and certain expenses are recognized
when paid rather than when the obligation is incurred. Accordingly, the
accompanying financial statements are not intended to present financial
29-5