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Negative assurance within accounting ethics (also known as limited assurance), is a method used by the Certified Public Accountant to assure various parties, such as bankers and stockbrokers, that financial data under review by them is reasonable. Negative assurance tells the data user that nothing has come to the CPA's attention of an adverse nature or character regarding the financial data reviewed.
This type of assurance is normally given to investment bankers and the SEC when the financial data are being used for stock and bond issuance. In addition, this assurance is given whenever a CPA is asked to comment on financial statements upon which a previous Audit Opinion has been rendered. (This type of assurance is unacceptable for the basic financial statements on which a certifying audit has been performed.) Negative assurance is also issued for in review engagements, which are a similar but lower level of service when compared to an audit.
Negative assurance comments are made on unaudited financial statements and subsequent changes, indicating that nothing came to the auditor's attention that suggests the statements do not comply with applicable accounting requirements; are not fairly presented in conformity with GAAP applied on a consistent basis; or do not fairly present information shown therein. Negative assurance is given because the auditor has not made an examination in conformity with Generally Accepted Auditing Standards (GAAS). Negative assurance is not appropriate unless the CPA has made an examination in accordance with GAAS for the accounting period before the current one. This is because the auditor needs evidence that can be related to comfort letter procedures. For negative assurance to be permissible, the evidence must have been gathered directly by the CPA giving the assurance, and not by another CPA.
Negative assurance is also used in modern day law practice, as the assurance can be used when a defense of "due diligence" needs to be established. Negative assurance is provided in letter format, and is used explicitly in conjunction with another document. The letter is usually used by the counsel to establish two standard facts about the document in question. Specifically, that the counsel has read the document in question, and that the counsel is not answerable for the document's accuracy, completeness, or fairness. While negative assurance is not considered a legal opinion, third parties and underwriters often use Negative assurance to circumvent accountability charges. [1]
Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms.
Certified Public Accountant (CPA) is the title of qualified accountants in numerous countries in the English-speaking world. It is generally equivalent to the title of chartered accountant in other English-speaking countries. In the United States, the CPA is a license to provide accounting services to the public. It is awarded by each of the 50 states for practice in that state. Additionally, all states except Hawaii have passed mobility laws to allow CPAs from other states to practice in their state. State licensing requirements vary, but the minimum standard requirements include passing the Uniform Certified Public Accountant Examination, 150 semester units of college education, and one year of accounting-related experience.
An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing also attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Auditors consider the propositions before them, obtain evidence, and evaluate the propositions in their auditing report.
A 'financial audit' is conducted to provide an opinion whether "financial statements" are stated in accordance with specified criteria. Normally, the criteria are international accounting standards, although auditors may conduct audits of financial statements prepared using the cash basis or some other basis of accounting appropriate for the organisation. In providing an opinion whether financial statements are fairly stated in accordance with accounting standards, the auditor gathers evidence to determine whether the statements contain material errors or other misstatements.
Forensic accounting, forensic accountancy or financial forensics is the specialty practice area of accounting that investigates whether firms engage in financial reporting misconduct. Forensic accountants apply a range of skills and methods to determine whether there has been financial reporting misconduct.
An auditor's report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditor as a result of an internal or external audit, as an assurance service in order for the user to make decisions based on the results of the audit.
An information technology audit, or information systems audit, is an examination of the management controls within an Information technology (IT) infrastructure and business applications. The evaluation of evidence obtained determines if the information systems are safeguarding assets, maintaining data integrity, and operating effectively to achieve the organization's goals or objectives. These reviews may be performed in conjunction with a financial statement audit, internal audit, or other form of attestation engagement.
The South African Institute of Chartered Accountants (SAICA), South Africa’s pre-eminent accountancy body, is widely recognised as one of the world’s leading accounting institutes. The institute provides a wide range of support services to more than 48 000 members and associates who are chartered accountants, as well as associate general accountants and accounting technicians.
Generally Accepted Auditing Standards, or GAAS are sets of standards against which the quality of audits are performed and may be judged. Several organizations have developed such sets of principles, which vary by territory. In the United States, the standards are promulgated by the Auditing Standards Board, a division of the American Institute of Certified Public Accountants (AICPA).
A going concern is a business that is assumed will meet its financial obligations when they fall due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the specified accounting period. The presumption of going concern for the business implies the basic declaration of intention to keep operating its activities at least for the next year, which is a basic assumption for preparing financial statements that comprehend the conceptual framework of the IFRS. Hence, a declaration of going concern means that the business has neither the intention nor the need to liquidate or to materially curtail the scale of its operations.
Materiality is a concept or convention within auditing and accounting relating to the importance/significance of an amount, transaction, or discrepancy. The objective of an audit of financial statements is to enable the auditor to express an opinion whether the financial statements are prepared, in all material respects, in conformity with an identified financial reporting framework such as Generally Accepted Accounting Principles (GAAP).
The New Jersey State Auditor is a constitutional officer appointed by the New Jersey Legislature and administratively placed within the Office of Legislative Services. The Auditor conducts financial and performance audits of State agencies, certain school districts, and vicinages of the Judiciary. The State Auditor also conducts studies on the operation, economy and efficiency of State-run or State-supported programs.
In the United States, the Single Audit, Subpart F of the OMB Uniform Guidance, is a rigorous, organization-wide audit or examination of an entity that expends $750,000 or more of federal assistance received for its operations. Usually performed annually, the Single Audit's objective is to provide assurance to the US federal government as to the management and use of such funds by recipients such as states, cities, universities, non-profit organizations, and Indian Tribes. The audit is typically performed by an independent certified public accountant (CPA) and encompasses both financial and compliance components. The Single Audits must be submitted to the Federal Audit Clearinghouse along with a data collection form, Form SF-SAC.
In the United States, the Auditing Standards Board (ASB) is the senior technical committee designated by the American Institute of Certified Public Accountants (AICPA) to issue auditing, attestation, and quality control statements, standards and guidance to certified public accountants (CPAs) for non-public company audits. Created in October 1978, it is composed of 19 members representing various industries and sectors, including public accountants and private, educational, and governmental entities. It issues pronouncements in the form of statements, interpretations, and guidelines, which all CPAs must adhere to when performing audits and attestations.
The following outline is provided as an overview of and topical guide to accounting:
Forensic accountants are experienced auditors, accountants, and investigators of legal and financial documents that are hired to look into possible suspicions of fraudulent activity within a company; or are hired by a company who may just want to prevent fraudulent activities from occurring. They also provide services in areas such as accounting, antitrust, damages, analysis, valuation, and general consulting. Forensic accountants have also been used in divorces, bankruptcy, insurance claims, personal injury claims, fraudulent claims, construction, royalty audits, and tracking terrorism by investigating financial records. Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials.
XBRL assurance is the auditor's opinion on whether a financial statement or other business report published in XBRL, is relevant, accurate, complete, and fairly presented. An XBRL report is an electronic file and called instance in XBRL terminology.
Positive assurance within accounting ethics, is the affirmation that a Certified Public Accountant believes a something to be true or correct. Issuing an opinion that the financial statements are presented fairly in conformity with U.S. GAAP is an example of a CPA providing positive assurance.
Statement on Standards for Attestation Engagements no. 16 is an auditing standard for service organizations, produced by the American Institute of Certified Public Accountants (AICPA) Auditing Standards Board, which supersedes Statement on Auditing Standards no. 70 and has been superseded by SSAE No. 18.
Statement on Standards for Attestation Engagements no. 18 is a Generally Accepted Auditing Standard produced and published by the American Institute of Certified Public Accountants (AICPA) Auditing Standards Board. Though it states that it could be applied to almost any subject matter, its focus is reporting on the quality of financial reporting. It pays particular attention to internal control, extending into the controls over information systems involved in financial reporting. It is intended for use by Certified Public Accountants performing attestation engagements, the preparation of a written opinion about a subject, and the client organizations preparing the reports that are the subject of the attestation engagement. It prescribes three levels of service: examination, review, and agreed-upon procedures. It also prescribes two types of reports: Type 1, which includes an assessment of internal control design, and Type 2, which additionally includes an assessment of the operating effectiveness of controls. Published April 2016, SSAE 18 and all previous standards it supersedes are represented in section AT-C of the AICPA Professional Standards, with most sections becoming effective on May 1, 2017.
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