PCAOB AS 2701: Auditing Supplemental Information
Auditing an Issuer Means Looking Beyond the Financial Statements
PCAOB AS 2701 addresses the auditor’s responsibilities when supplemental information accompanies audited financial statements. This 2-hour CPE training event explains how auditors should evaluate whether supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
Supplemental information may appear secondary to the financial statements, but it often creates significant audit risk. These schedules may be prepared outside the normal close process, maintained in spreadsheets, supported by operational systems, or required by regulators. PCAOB inspections continue to highlight deficiencies when auditors perform only basic tie-outs, fail to test underlying data, or use incomplete reporting language.
This event helps auditors understand how AS 2701 applies in public company audits, broker-dealer engagements, regulatory schedules, combining schedules, segment information, and other supplemental reporting included with audited financial statements.
Who Should Attend?
This event is designed for:
- External auditors of public companies
- PCAOB-registered firm personnel
- Audit managers and senior auditors
- SEC reporting professionals
- Internal auditors involved in disclosure controls
- SOX compliance professionals
- Financial reporting managers
- Audit committee support personnel
- Professionals responsible for regulatory schedules or supplemental reporting
Benefits of Attending
Attendees will gain practical guidance for identifying, auditing, documenting, and reporting on supplemental information under PCAOB AS 2701. The event will help auditors avoid common deficiencies involving superficial tie-outs, weak documentation, incomplete testing, and improper reporting language.
Details on Event Presentation
Offered as a 2 CPE-credit group internet-based seminar.
We can schedule private events on your timetable for two or more attendees.
Register Today
Achieve excellence in interim financial reviews with this focused, 2-hour CPE training seminar on PCAOB AS 2701. Equip yourself with the methodologies and technical insights necessary to deliver high-quality interim audits and strengthen your professional standing.
Register now and ensure your audits are conducted with precision, reliability, and compliance!
Details on Event Presentation
Offered every eight weeks on Fridays at 10:00 a.m. to 12:00 noon Central Time in two CPE-Credit event.
We can schedule private events on your timetable for two or more attendees.
NASBA Program Disclosure
Program Level of Understanding: Basic
Prerequisites: None
Advance Preparation: None
Delivery Format: Seminar (Group Internet Based)
NASBA Field(s) of Study: Auditing
CPE Credits: 2, based on 50 minutes of instruction per hourCPE Event Highlights
Attendees will review:
- The purpose and scope of PCAOB AS 2701
- The definition of supplemental information
- How AS 2701 differs from AS 2705 and AS 2710
- Auditor responsibilities for testing completeness and accuracy
- Reconciliation of supplemental information to accounting records
- Regulatory schedules and compliance-driven supplemental reporting
- Management representations related to supplemental information
- Reporting requirements and opinion modifications
- Common PCAOB inspection concerns involving supplemental information
Learning Objectives
Attendees will:
- Identify when PCAOB AS 2701 applies to supplemental information accompanying audited financial statements.
- Understand the auditor’s objective of determining whether supplemental information is fairly stated in relation to the financial statements as a whole.
- Apply audit procedures to test completeness, accuracy, reconciliation, and regulatory compliance.
- Evaluate how modified financial statement opinions affect reporting on supplemental information.
- Recognize common audit deficiencies involving spreadsheets, weak controls, unsupported allocations, and inadequate documentation.
Key Issues on the Agenda
Section 1 — Understanding Supplemental Information
- What is supplemental information?
- How supplemental information differs from required supplementary information and other information
- SEC-required supporting schedules
- Broker-dealer supplemental schedules
- Insurance statutory schedules
- Combining schedules
- Segment and disaggregated financial data
- KPI disclosures and annual report tables
- Why supplemental information creates elevated audit risk
Section 2 — PCAOB AS 2701 Requirements
- Introduction and objective of AS 2701
- Performing audit procedures on supplemental information
- Risk of material misstatement
- Materiality considerations
- Use of evidence from the financial statement audit
- Understanding preparation methods and criteria
- Testing completeness and accuracy
- Evaluating regulatory requirements
- Management representations
- Evaluation of audit results
Section 3 — Reporting and Audit Quality Concerns
- Reporting under AS 2701
- Qualified opinions
- Adverse opinions
- Disclaimer of opinion
- Required supplemental information report language
- PCAOB inspection findings
- Documentation expectations
- Common audit failures
- Practical audit quality considerations
Summary of the Subject Matter
PCAOB AS 2701 requires auditors to perform procedures and report on supplemental information when engaged to do so in connection with audited financial statements. The auditor’s objective is to obtain sufficient appropriate audit evidence to express an opinion on whether the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
This subject is important because supplemental information often includes schedules and disclosures that regulators, investors, analysts, and audit committees rely upon. These schedules may include SEC supporting schedules, broker-dealer schedules, insurance regulatory schedules, segment reporting, combining schedules, statistical data, or compliance-related information.
The course emphasizes that auditors cannot rely only on agreement to the financial statements. They must understand how the information was prepared, evaluate the methods used, test completeness and accuracy, assess management assumptions, reconcile the information to underlying records, and determine whether the form and content comply with applicable criteria or regulatory requirements.
Authoritative Sources
Here are some resources that serve as guiding lights, offering insights, clarity, and a deeper connection to the principles and practices discussed during the event. These aren't just links on a page; they're gateways to a broader understanding and a more profound application of your knowledge.
- Public Company Accounting Oversight Board (PCAOB) - AS 4105: Reviews of Interim Financial Information: Starting with the standard itself is essential. It provides the foundational knowledge, detailing the objectives, scope, and requirements of AS 4105. This document is indispensable for anyone looking to deepen their understanding of reviews of interim financial information.
- American Institute of CPAs (AICPA) - Performing Review Engagements: While focused on review engagements broadly, this resource offers valuable insights that can be applied to the review of interim financial information. It covers best practices, ethical considerations, and practical guidance for conducting review engagements effectively.
- Journal of Accountancy - Tips for More Effective Review Engagements: This article provides practical tips and strategies for conducting review engagements, including reviews of interim financial information. It's a great read for anyone looking to improve their review processes and ensure their engagements are both efficient and effective.
- Deloitte - Interim Financial Information: Deloitte offers insights into the nuances of reviewing interim financial information, including considerations specific to different industries and regulatory environments. This resource can help you apply the principles of AS 4105 with a nuanced understanding of various contexts.
Embarking on this journey of discovery and mastery, each resource you engage with is more than just a step toward fulfilling professional requirements; it's a step toward becoming a steadfast guardian of financial integrity. In a world ever more complex and interconnected, our role in conducting reviews of interim financial information with diligence, skepticism, and a keen eye for detail has never been more critical. As you delve into these resources, may you find not only knowledge but also inspiration—a reminder of the profound impact our work has on upholding trust and transparency in the financial landscape.