Experience Definitions - Issuing Reports on Financial Statements
Issuing reports on financial statements includes the examination of financial statements that are intended to present financial position (balance sheet and statement of retained earnings), results of operations (income statement), and statement of cash flows in conformity with generally accepted accounting principles accompanied by the expression of a competent opinion concerning the fairness of the presentation of those financial statements in accordance with generally accepted auditing standards. Issuing reports on financial statements also covers participating in performing an examination, an audit, a review, a compilation or an agreed-upon procedures report on subject matter, or an assertion about the subject matter that is the responsibility of another party. Attestation engagements concern examining, auditing reviewing, compiling or performing agreed upon procedures on a subject matter or an assertion about a subject matter and reporting on the results. The subject matter may take many forms, including historical or prospective performance or condition, physical characteristics, historical events, analyses, systems and processes, or behavior. Engagements can cover a broad range of financial or non-financial objectives and can be part of a financial statement audit or other type of audit. A CPA candidate's experience in issuing reports on financial statements also includes participation in preparing and/or advising on:
- Specified elements, accounts, or items of a financial statement;
- Interim financial information or segments of financial statements;
- Letters for underwriters and certain other requesting parties;
- Year-end audit. This may include assisting the client in calculating the amount of the income taxes owed, valuing stock options and other stock compensation arrangements under FAS 123, and drafting and typing up the financial statements.
- Review of interim (monthly, quarterly) financial statements.
- Compilation of financial statements.
- Valuations of derivatives at fair market value for accounting purposes.
- Assistance in preparation of and review of filings with the SEC, including initial public offerings.
- Underwriter comfort letters for SEC and non-SEC filings.
- Audit of Management's Discussion and Analysis in SEC filings.
- Agreed upon procedures engagement (the client and auditor agree to procedures the auditor is to perform with respect to tasks such as testing a royalty arrangement or compliance with a loan agreement, and the auditor then issues a report on his or her findings).
- Audit or review of financial forecasts or projections. This includes such documents included in offering memoranda.
- Providing advice on how to interpret new accounting pronouncements, including providing sample journal entries.
- Audits of financial statements of pension plan financial statements.
- Director examinations of financial institutions.
- CPA WebTrust - an engagement to review the security of a company's website that is conducting electronic commerce over the internet.
- Assisting international companies in conforming their financial reporting to U.S. financial reporting practices (GAAP conversions).
- Technical opinions on accounting matters to clients of other accounting firms.
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