CHAPTER 17 Other Services Provided by Audit Firms

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Agreed-upon procedures engagement
An agreement in which a practitioner is engaged by a client to issue a
report of findings based on specific procedures performed on subject
matter.
Assembling
An activity that involves the manual or computer processing of
mathematical or clerical functions to achieve the presentation of
prospective financial statements.
Assurance engagement
An engagement in which a practitioner expresses a conclusion
designed to enhance the degree of confidence of the intended users
other than the responsible party about the outcome of the evaluation
or measurement of a subject matter against criteria.
Assurance engagement risk
The risk that the practitioner expresses an inappropriate conclusion
when the subject matter information is materially misstated.
Attestation 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. See assurance engagement.
Attestation standards
Professional standards that provide guidance about gathering evidence
regarding specific assertions and communicating an opinion on the
fairness of the presentation to a third party.
Bookkeeping services
See compilation.
Cash basis
A basis of accounting that an organization uses to record cash receipts
and disbursements and modifications of the cash basis having
substantial support (for example, recording depreciation on fixed
assets).
Compilation engagement
An engagement in which the accountant uses accounting expertise, as
opposed to auditing expertise, to collect, classify, and summarize
financial information; also defined as a service, the objective of which
is to assist management in presenting financial information in the form
of financial statements without undertaking to obtain or provide any
assurance that there are no material modifications that should be
made to the financial statements in order for the statements to be in
conformity with the applicable financial reporting framework.

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Contractual basis
A basis of accounting that the entity uses to comply with an agreement
between the entity and one or more third parties other than the
auditor.
Corporate social responsibility reporting
The continuing commitment by business to behave ethically and
contribute to economic development while improving the quality of life
of the workforce, their families, the local community, and society at
large.
Financial forecast
A forecast that includes prospective financial statements that present,
to the best of the responsible partys knowledge and belief, an entitys
expected financial position, results of operations, and cash flows.
Financial projection
A projection that includes prospective financial statements that
present, to the best of the responsible partys knowledge and belief,
given one or more hypothetical assumptions, an entitys expected
financial position, results of operations, and cash flows.
Forensic accounting
A service that audit firms provide that involves detailed investigation of
situations where fraud has already been identified or where fraud is
highly suspected.
Limited assurance engagement
An engagement whose objective is a reduction in assurance
engagement risk to a level that is acceptable in the circumstances of
the engagement, but where that risk is greater than that for a
reasonable assurance engagement, as the basis for a negative form of
expression of the practitioners conclusion.
Nonfinancial reporting
The practice of measuring, disclosing, and being accountable to
internal and external stakeholders for organizational performance
toward the goal of sustainable development.
Other comprehensive bases of accounting
Bases of accounting that include cash basis, tax basis, regulatory
basis, or contractual basis.
Pro forma financial information
Information that shows what the significant effects on historical
financial information might have been had a consummated or
proposed transaction (or event) occurred at an earlier date.

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Prospective financial statements
Financial forecasts or financial projections including the summaries of
significant assumptions and accounting policies.
Reasonable assurance engagement
An engagement whose objective is a reduction in assurance
engagement risk to an acceptably low level in the circumstances of the
engagement as the basis for a positive form of expression of the
practitioners conclusion.
Regulatory basis
A basis of accounting that the entity uses to comply with the
requirements of financial reporting provisions of a regulatory agency to
whose jurisdiction the entity is subject (for example, a basis of
accounting that insurance companies use pursuant to the accounting
practices prescribed or permitted by a state insurance commission).
Review engagement
An engagement that enables a practitioner to state whether, on the
basis of procedures which do not provide all the evidence that would
be required in an audit, anything has come to the practitioners
attention that causes the practitioner to believe that the financial
statements are not prepared, in all material respects, in accordance
with the applicable financial reporting framework.
Specified parties
Individuals who will receive the practitioners agreeupon procedures
report.
Special-purpose financial statements
Financial statements that are prepared in accordance with a specialpurpose framework.
Special-purpose framework
A financial reporting framework other than GAAP that is one of the
following bases of accounting: cash basis, tax basis, regulatory basis,
or contractual basis.
Sustainability
Actions taken at the corporate level
environmental, and social responsibility.

to

ensure

economic,

Sustainability reporting
Voluntary corporate disclosures about sustainability initiatives, plans,
and associated outcomes.
Tax basis
A basis of accounting that the entity uses to file its income tax return
for the period covered by the financial statements.

CHAPTER 17 Other Services Provided by Audit Firms

Triple bottom-line reporting
Reporting on financial, environmental, and social performance.

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