2018 Public Entities Updated and Enhanced for Broker or Dealer Entities

For high-quality audits that comply with AICPA Risk Assessment Standards, equip yourself with Knowledge-Based Audit (KBA) titles. Each title based on the KBA framework includes the latest audit requirements for a specific type of company or organization. Since Wolters Kluwer is always looking for ways to enhance our Knowledge Coach titles, we are excited to introduce the new enhancements for Broker or Dealer Entities within the Knowledge-Based Audit of Public Entities, which will be available for CCH ProSystem fx Knowledge Coach in October 2018.

Enhancements for Broker or Dealer Entities

First, the following enhancements help the auditor efficiently and effectively perform attestation procedures for broker or dealer entities in accordance with the PCAOB attestation standards:

  • Examinations regarding compliance reports
  • Reviews regarding exemption reports
  • Agreed-upon procedures of SIPC reports

Secondly, here is a glimpse at the enhancements for Broker or Dealer entities:

  • Many new workpapers:
    • AUD-910 Audit Program: Broker or Dealer Additional Procedures
    • ATT-830 Attestation Program: Examination Engagement
    • ATT-831 Attestation Program: Review Engagement
    • ATT-832 Attestation Program: Agreed-Upon Procedures
    • KBA-101A Overall Examination or Review Engagement Strategy for Broker or Dealer Engagements
    • COR-900A Management Representation Letter: Examination of Broker or Dealer
    • COR-900B Management Representation Letter: Review of Broker or Dealer
    • COR-900C Management Representation Letter: SIPC Agreed Upon Procedures
    • COR-912A Communication with the Audit Committee: Examination
    • COR-912B Communication with the Audit Committee: Review
    • RPT-0985 Attestation Opinion: Broker or Dealer Examination
    • RPT-0986 Attestation Qualified Opinion: Broker or Dealer Examination Material Weakness Existed During the Most Recent Fiscal Year
    • RPT-0990 Attestation Report: Broker or Dealer Review
    • RPT-0991 Attestation Modified Report: Broker or Dealer Review Unreported Exception
    • RPT-0995 Agreed Upon Procedures Report: Entity’s Claim for Exclusion from Membership (Form SIPC-3)
    • RPT-0996 Agreed Upon Procedures Report: General Assessment Reconciliation (Form SIPC-7)
    • RPT-0997 Agreed Upon Procedures Report: General Assessment Reconciliation (Form SIPC-7B)
  • Adding new tables in KBA-103 to document Findings or Exceptions noted in the new ATT workpapers for Examinations, Reviews or Agree-Upon Procedures
  • New tailoring questions regarding broker or dealers in AUD-100

What’s New for 2018 Knowledge-Based Audits of Public Entities?

Third, the 2018 PCAOB title also:

  • Reorganizes multiple areas within the Audit Programs to increase efficiency and improve workflow
  • Enhances:
  • Instructions and procedures throughout the toolset to improve workflow
  • The activity-level control forms with updated sub-processes and activity-level control objectives throughout all the KBA-403 series workpapers
  • Adds new:
  • Links to TeamMate Analytics throughout the AUD-800 series programs to assist the auditor with analytical procedures that are beneficial in the audit process
  • Reorganized columns in the workpapers documenting internal controls (KBA-400s) to improve workflow and address questions customers have raised in the past
  • Refer to KCO-001 for more descriptive changes and roll forward considerations
  • Comments table in AUD-100 Engagement-Level Tailoring Questions to document any information you want to capture related to tailoring
  • RES-025 Controls Related to FASB ASC 606, Revenue from Contracts with Customer – Five Step Model to assist users whose clients have adopted the new Revenue Recognition Standards
  • Example planned response to Management Override of Controls in KBA-502, which flows to the AUD-800 series. This can be modified in the risk pane for the Financial Statement Level Risk of Management Override of Controls and should be modified by the user based on the specific audit
  • Updates:
  • The benchmark/rule of thumb percentage table in KBA-301 Worksheet, so users will be able to document a separate benchmark and rule of thumb percentage not used in the KBA methodology, for:
  • Determination of Materiality
  • Performance Materiality
  • Thresholds for Trivial Amounts
  • Audit program name for AUD-809 from Payroll and Other Liabilities to Payroll and Related Liabilities

Current Through:

In addition, regarding this title’s enhancements, keep in mind that the 2018 Knowledge-Based Audits of Public Entities is current through:

  • AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion
  • FASB Accounting Standards Codification™ as of June 30, 2018, through Accounting Standards Update No. 2018-08
  • AICPA Statement on Auditing Standards (SAS) No. 133, Auditor Involvement with Exempt Offering Documents
  • AU 722, Interim Financial Information
  • PCAOB Staff Audit Practice Alert No. 15, Matters Related to Auditing Revenue from Contracts With Customers

Tips to Improve Realizations & Client Service

Obviously, increasing your realizations and improving your client service are critical to maximizing efficiencies. After all, a healthy bottom line and improved client service are both important. With that in mind, consider these tips:

  • Tip #1: When you roll-forward your prior year engagements, make sure you get the latest content updates. Also, make sure you keep your responses, where it makes sense. Then, simply review for changes.
    • CCH ProSystem fx Knowledge Coach allows updating to the latest content at any time, while keeping your answers and customizations. Given these points, take advantage of the saved time and start your planning!
  • Tip #2: Tailor your audit programs in direct response to the client’s risk, to avoid over and under auditing. Additionally, doing so gives you the ‘best bang for your buck’ with your audit procedures.
    • By design, Knowledge Coach easily ties risks to audit procedures. As a result, the audits that a firm delivers are higher quality and more efficient. Not surprisingly, these firms also have happier clients.
  • Tip #3: Give yourself a head start by reducing your client’s PBC list by approximately twenty-five percent through technology.
    • CCH Audit Accelerator requests all the data needed from your client’s general ledger, accounts payable and accounts receivable sub-ledger. Then, it transforms that data into the most commonly used workpapers, including access to the detailed transactions. The auditor can then see anomalies or risky transactions more quickly by running analytics with TeamMate Analytics. What you gain as a result is:
      • More answers at your fingertips
      • A more informed view of your client at the beginning of each engagement
      • Insights for planning a higher quality audit

Wolters Kluwer’s Integrated Audit Approach

To sum up, these solutions comprise Wolters Kluwer’s Integrated Audit Approach. This approach seamlessly unites CCH Audit Accelerator, CCH ProSystem fx Engagement, TeamMate Analytics, CCH ProSystem fx Knowledge Coach, and CCH Accounting Research Manager. Moreover, the Knowledge-Based Audit Methodology is essential to why this approach delivers higher quality audits while improving productivity through process improvement.

Above all, the Integrated Audit Approach keeps you prepared for changes to auditing, peer review, and regulatory standards. In other words, it helps you stay ahead of your competition. In fact, the combination of solutions helps firms maximize realizations and increase audit quality to ensure peer review readiness. So if you have not seen these solutions in action, it is certainly worth your time to do so. Consider attending a complimentary demo at a time that fits your schedule.

In conclusion, take a moment to subscribe to our Audit Intelligence (AI) Spotlights monthly newsletter. From it, you will learn about audit news, whitepapers, webinars and more – delivered straight to your inbox.


Kurt Pitts

Kurt Pitts is a Senior Business Analyst at Wolters Kluwer Tax and Accounting North America. Kurt participates in design and development of CCH® ProSystem fx® Knowledge Coach. Kurt also works with internal teams, editorial and customers to provide new features and industry titles for CCH® ProSystem fx® Knowledge Coach. Prior to joining Wolters Kluwer in 2014, Kurt was a CPA with a top Southeast Regional Accounting Firm and has a Bachelor’s Degree in Accounting from Georgia Southwestern State University.

All stories by: Kurt Pitts