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The industry standard for dealership engagements!
This Guide offers a systematic approach for providing accounting, auditing, compilation and review, tax, and consulting services to your dealership clients. The Guide contains the most current guidance on issues affecting the dealership industry.
The following are some of the important features in the 2009 edition:
Updated Industry Statistics and Trends. To assist you in better understanding the business drivers and risks relative to their clients, industry statistics and trends have been updated to reflect the current economic environment. New guidance has also been added to help dealership auditors identify and address important accounting issues and carry out additional audit procedures that may be necessary in the current economic downtrend.
Clarified and Streamlined Audit Process and Tools. Customer feedback indicates that there is sometimes confusion over what practice aids are considered necessary in an audit engagement. We have added a tool that distinguishes between forms that are used in most engagements to meet audit documentation requirements and other forms that are considered supplementary. We also have provided guidance on how memos or alternative documentation methods may be used to document the required information and how information from the planning forms flows to performing a risk assessment and tailoring the audit programs. We streamlined the planning process by combining two of the 2008 forms, DLR-CX-3.1 and DLR-CX-6.1, into one new form. On this combined form, you will gather information about the entity, identify potential risks, and determine if any of the identified potential risks need to be carried forward to DLR-CX-7.1, “Risk Assessment Summary Form.”
Expanded Guidance on Understanding Internal Control. Obtaining a sufficient understanding of internal control is a critical requirement of the risk assessment standards that may involve considerable effort. You have indicated this is one of the most difficult areas to implement. We’ve responded by expanding our practical guidance on understanding the design and implementation of internal control. For example, your Guide provides additional focus and guidance on control objectives that address financial statement assertions and examples to assist you in identifying key controls that achieve those objectives. Our practical, step-by-step guidance will help you navigate the process of understanding your client’s controls effectively and efficiently.
Revised Guidance and Tools for Communicating Significant Deficiencies in Internal Control. In October 2008, the AICPA issued SAS No. 115, Communicating Internal Control Related Matters Identified in an Audit, which supersedes SAS No. 112 for audits of periods ending on or after December 15, 2009, with early implementation permitted. Among other things, the new SAS revises the definitions of “significant deficiencies” and “material weaknesses” in internal control. We’ve updated your guidance and tools for the new SAS, including a revised internal control deficiency evaluation worksheet and revised communications.
Communications with Those Charged with Governance. SAS No. 114, The Auditor’s Communication with Those Charged with Governance, requires communication of the auditor’s responsibilities under GAAS and the planned scope and timing of the audit to those charged with governance. These matters may be communicated in the engagement letter if that letter is provided to those charged with governance. However, you may use a separate communication, which also provides an opportunity for additional interaction with the entity’s governing body. We’ve provided an illustrative letter that may be used to communicate separately with those charged with governance during audit planning.
Revised Sampling Guidance and Tools. We have updated and expanded your guidance and tools for the 2008 revision of the AICPA Audit and Accounting Guide, Audit Sampling, including new guidance on sample sizes for small populations and infrequently operating controls.
FASB Accounting Standards Codification References. As this edition of the Guide went to press, the FASB has launched its massive Codification project, effective for periods ending after September 15, 2009. The FASB Accounting Standards Codification is designed to present all the authoritative U.S. accounting and financial reporting literature in a single, integrated offering. Users of accounting and financial reporting literature will now have to become familiar with a whole new reference system. To help you with this transition, we have provided a summary of the project and integrated FASB Codification references throughout this Guide.
New Authoritative Literature. Your Guide has been updated for new authoritative literature to make sure you apply the latest guidance in your audits.
Updated Disclosure Checklist. We’ve updated our disclosure checklist to help ensure that your clients’ financial statements are accurate and complete.
TOC for DLR
INTRODUCTORY MATERIAL
PREFACE
PEER REVIEW OF THIS GUIDE
HOW TO USE THE GUIDE
ACKNOWLEDGMENTS
ABOUT THE AUTHORS . . .
ACKNOWLEDGMENT OF COPYRIGHTS
LIST OF SUBSTANTIVE CHANGES AND ADDITIONS
CHAPTER 1: OVERVIEW OF DEALERSHIPS
100 INTRODUCTION
101 FORMS OF ORGANIZATION
Proprietorships
Compensation and Payroll Tax Issues.
General Partnerships
Limited Partnerships
Corporations
C Corporations and S Corporations.
C Corporations.
Section 1202 Stock.
S Corporations.
Rules for Qualification, Election, and Stockholder Consent for S Corporations.
Section 1244 Stock.
Limited Liability Companies
102 FRANCHISE RELATIONSHIPS
Franchise Agreements
Common Requirements of a Franchise Agreement
Term of the Agreement
Termination of the Agreement
103 INDUSTRY TRENDS
Rising New Car Prices
Used Vehicle Superstores
Fewer Dealerships in the Future
Megadealerships
Retail Chains
Publicly Held Retail Chains.
Online Marketplaces
Financing for High Credit Risk Customers
Demand for Lease Vehicles
Direct Repair Programs
Other Trends
104 DEALERSHIP CONSOLIDATIONS
Terminating Franchises
Stand-alone Franchises
Involvement by Accountants
105 INDEPENDENCE AND THE PERFORMANCE OF NONATTEST SERVICES FOR DEALERSHIPS
Conceptual Framework for Independence
No Independence Interpretations or Rulings.
Unacceptable Risk.
Threats.
Safeguards.
Required Documentation.
Nonattest Services
Should Proposing Journal Entries and Preparing Financial Statements in Connection with an Audit be Viewed as Bookkeeping and, Therefore, Nonattest Services?
Additional Questions in Applying Interpretation 101-3.
Illustrative Examples.
Staff Members on Loan.
Unpaid Fees.
Client Employee.
Financial Interests.
Other Independence Requirements.
106 THE ECONOMIC CONTRACTION THAT STARTED IN 2008
Introduction
The Characteristics of the Economic Contraction
Fair Value Measurements and Disclosures
Authoritative Literature.
Fair Value Measurement and Disclosure Principles.
Inactive Markets.
Accounting Considerations
Receivables.
Inventories.
Deferred Tax Assets.
Goodwill and Other Intangible Assets.
Long-lived Assets.
Declines in the Fair Value of Marketable Securities.
Troubled Debt Restructurings.
Exit or Disposal Activities and Discontinued Operations.
Liquidation of the Dealership
Disclosure Considerations
The Ability of the Dealership to Continue as a Going Concern.
Disclosure of Subsequent Events.
Disclosure of Commitments, Contingencies, Risks, and Uncertainties.
Illustrative Disclosures
107 SCOPE OF PPC'S GUIDE TO DEALERSHIPS
CHAPTER 2: THE OPERATIONS OF DEALERSHIPS
200 INTRODUCTION
Location
Departmental Structure
Glossary of Terms
201 NEW VEHICLE SALES DEPARTMENT
Purchase of New Vehicles
Documents.
Stock Numbers.
Sale of New Vehicles
Retail Sales.
Fleet Sales.
Internal Sales.
Demonstrators
Compensation
202 USED VEHICLE SALES DEPARTMENT
Obtaining Inventory
Trade-ins.
Purchases.
Program Vehicles.
Stock Numbers
Inventory Turnover
Buy-here, Pay-here Lots
Compensation
203 PARTS DEPARTMENT
Customers
Internal Sales.
Over-the-counter Customers.
Wholesale Parts Sales.
Inventory Levels
Special Orders.
Emergency Purchases.
Monthly Manufacturer Account Statement
Compensation
204 SERVICE DEPARTMENT
Customer Vehicles
Company-owned Vehicles
Repair Orders
Warranty Repairs
Sublet Repairs
Compensation
205 BODY SHOP
Compensation
206 LEASE AND RENTAL DEPARTMENT
Leases
Daily Rentals
Loan Vehicles
Compensation
207 FINANCE AND INSURANCE DEPARTMENT
Financing
Chargebacks.
Recourse or Nonrecourse?
Insurance
Extended Warranty Contracts
Compensation
208 FLOOR PLAN ARRANGEMENTS
Out of Trust
Floor Plan Allowance or Assistance
Curtailment
209 DEAL FILE
210 USE OF COMPUTERS
History and Background
Current Accounting and Financial Reporting Systems
Finance and Insurance Application.
Parts Invoicing Application.
Service Invoicing Application.
Check Writing Application.
Other Financial Applications.
Integrated Application Software.
Potential Risks and Concerns
Marketing through the Computer
The Internet.
Application to Dealerships.
Computers in the Future
211 RECORD STORAGE
CHAPTER 3: ACCOUNTING CONSIDERATIONS
300 INTRODUCTION
301 GENERAL CONSIDERATIONS
Accounting Principles for Dealerships
FASB Codification
Resulting Changes.
Changes to This Guide for the Codification.
Cumulative Materiality Considerations
Differences between the Tax and GAAP Treatment of Certain Transactions
302 INVENTORY CONSIDERATIONS
Pricing New Vehicles
Dealership Preparation and Other Charges.
Holdback Programs.
Manufacturer Incentive Programs.
Floor Plan Assistance Payments.
Cooperative Advertising Allowances.
Cutoff Problems.
Lower of Cost or Market Considerations.
Company Vehicles.
Demonstrators.
Dealer Trades.
Supplemental Advertising Fee.
Pricing Used Vehicles
Determining Wholesale Price.
Determining Normal Gross Profit.
Pricing Parts
Applying LIFO
Deferred Tax Considerations.
Interim Computations.
Used Vehicles.
Estimating the LIFO Adjustment.
Other Inventories
Work in Progress.
Oil, Gas, and Tires.
Section 263A Adjustments
IRS Conformity Regulations
Rev. Rul. 97-42.
303 SALES INCENTIVES OFFERED TO CUSTOMERS
Sales Incentives Offered to Customers by the Dealership
Accounting for Cash Incentives.
Product or Service Incentives.
Sales Incentives Offered to Customers by the Manufacturer
304 FINANCING AND INSURANCE (F&I) ACTIVITIES
Financing
Recognizing Financing Income.
Repossession Losses under Recourse Arrangements.
Interest Accrued Subsequent to Sale of Receivables.
Accounting for Transferred Receivables if the Dealership Regains Control.
Servicing of Loans Sold.
Chargebacks and Dealer Reserves.
Insurance Sales
Extended Warranty Contracts
Dealership Acting as a Broker.
Dealership Is the Warrantor.
Repair Work Performed for the Factory.
Maintenance Service Contracts
Used Vehicle Lot Issues
Buy-here, Pay-here Lots.
Notes Sold to High Credit Risk Lenders.
305 LEASING ACTIVITIES AS LESSOR
Long-term Rentals
Sales-type Leases.
Daily Rentals
306 RELATED PARTY LEASING ARRANGEMENTS
307 PAYABLES
Customer Deposits
Surplus on the Sale of a Repossessed Vehicle
308 ENVIRONMENTAL RELATED COSTS
Accruing Environmental Remediation Liabilities
Accrual for Legal Obligation.
Accrual for Specific Environmental Remediation Threats.
Accrual for General Contingencies.
Should Environmental-related Cleanup Costs Be Capitalized or Expensed?
Asbestos Removal
Do Environmental Concerns Lead to Questions about the Impairment of Property and Equipment?
309 IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLES
Long-lived Assets and Amortized Intangibles
Classification of a Long-lived Asset.
Is an Impairment Assessment Necessary?
Assets to Be Held and Used or Held for Disposal Other Than by Sale.
Assets Held for Sale.
Goodwill and Intangibles with Indefinite Useful Lives
Intangibles with Indefinite Useful Lives.
Goodwill.
310 DEFERRED TAXES
Accounting for Income Taxes
Deferred Income Taxes
Types of Temporary Differences.
Uncertainty in Income Taxes.
Calculating Deferred Taxes.
Considering the Need for a Valuation Allowance.
Tax Rates.
Examples of Temporary and Permanent Differences.
Disclosures about Deferred Taxes and Uncertainty in Income Taxes
311 ADVERTISING THROUGH CONTRIBUTIONS
Advertising
Charitable Contributions
Arrangements with Not-for-profit Organizations
312 WEBSITE DEVELOPMENT COSTS
Cost Categorization
Planning the Website.
Developing the Applications and Infrastructure.
Developing Graphics.
Developing Content.
Operating the Site.
313 DISCONTINUANCE OF A PRODUCT LINE
Costs Associated with Exit or Disposal Activities
One-time Termination Benefits.
Contract Termination Costs.
Costs to Consolidate or Close Facilities, Relocate Employees, and Other Associated Costs.
Presentation and Disclosure.
Dealerships that Have Elected Liquidation
General Approach to Liquidation Accounting.
Determining Liquidation Values.
Subsequent Adjustment of Liquidating Values.
314 CHART OF ACCOUNTS
CHAPTER 4: FINANCIAL STATEMENT CONSIDERATIONS
400 INTRODUCTION
401 MANUFACTURER FINANCIAL STATEMENTS VERSUS CONVENTIONAL PRESENTATIONS
Manufacturer Statements
Operating Report.
Departmental Profitability.
Departmental Sales and Gross Profit Analysis.
Lease and Rental Activity.
Conforming Manufacturer Statements to GAAP
402 GENERAL PRESENTATION CONSIDERATIONS
Basic Financial Statements
Basis of Accounting
Comparative Statements
Related Entities
Variable Interest Entities.
Amount of Detail
Interdepartmental Sales
403 FORMAT CONSIDERATIONS
Financial Position
Classification of Assets and Liabilities.
Order of Presentation.
Deferral of Future Change in Accounting Principles for the Presentation of Equity Interests the Dealership Must Redeem upon the Owner's Death.
Proposed Revisions to SFAS No. 150.
Illustrative Presentation.
Results of Operations
Illustrative Presentation.
Comprehensive Income.
Cash Flows
Operating Activities.
Illustrative Presentation.
Notes to Financial Statements
404 CONTRACTS IN TRANSIT
405 ACCOUNTS RECEIVABLE
General Presentation and Disclosure Considerations
Offsetting Manufacturer Accounts.
Captions.
Valuation Allowances
Disclosure Considerations.
Chargeback Provisions.
Illustrative Disclosures
Disclosure on the Face of the Statement.
Disclosure in a Note.
Disclosure of the Basis for Estimating the Valuation Allowance.
406 NOTES RECEIVABLE
Classification
Valuation Allowances
Impairment of Notes Receivable
Special Disclosures
407 INVENTORIES
Disclosing Types of Inventories
How Much Detail Should Be Provided?
Demonstrators.
Captions.
Disclosing Inventory Components on the Statement.
Disclosure in a Note.
Disclosing Valuation Methods
Disclosure on the Statement.
Disclosure in a Policy Note.
Disclosure in a Separate Note.
LIFO Disclosures
Valuation Allowances
408 LEASING ACTIVITIES
409 LIABILITIES
Floor Plan Lines
Deferred Gross Profit on Extended Warranty Contracts
Guarantees by the Dealership
Loss Provisions
410 INCOME TAXES
Adjustments of Prior-year Current Tax Expense
IRS Assessments
Interest and Penalties
411 FINANCIAL INSTRUMENT DISCLOSURES
Identifying Financial Instruments of Dealerships
Credit and Market Risk Disclosures
Concentrations of Credit Risk.
Recourse Arrangements.
Market Risk.
Fair Value Disclosures
Financial Instruments.
Investments in Debt and Equity Securities.
Other-than-Temporary Impairment of Securities.
Fair Value Measurements.
Recent Developments to Provide Further Guidance on Fair Value Measurements.
Pending Developments to Provide Further Guidance on Fair Value Measurements.
412 DERIVATIVES
A Quick Overview of the Accounting Requirements
Derivative Instrument Basics
Definition of Derivative.
Underlyings, Notional Amounts, and Payment Provisions.
Initial Net Investment.
Net Settlement.
Disclosures about Derivative Instruments and Hedging Activities
Applying Those Basics to Interest Rate Swap Contracts
Example of an Interest Rate Swap.
Hedge Accounting
Documentation.
Assessing Hedge Effectiveness.
Financial Statement Presentation and Disclosure Considerations for a Cash Flow Hedge Using an Interest Rate Swap.
413 RISKS AND UNCERTAINTIES DISCLOSURES
Nature of Operations
Estimates
Certain Significant Estimates
Current Vulnerability Due to Concentrations
Volume of Business with Particular Customers, Suppliers, or Lenders.
Revenue from Particular Products or Services.
Available Sources of Supply of Materials, Labor, or Services or of Licenses or Other Rights Used in Operations.
Market or Geographic Area in Which the Dealership Conducts Its Operations.
Audit Procedures
414 EFFECT OF MANUFACTURER CONSOLIDATION PROGRAMS
415 DISCONTINUANCE OF PRODUCT LINE
Discontinued Operations
Exit or Disposal Costs.
416 ACCOUNTING FOR INTERESTS IN VARIABLE INTEREST ENTITIES
The Role of FIN 46(R)
What Is a Variable Interest?
What Is a Variable Interest Entity?
Assessing the Sufficiency of Equity.
Expected Variances in Estimated Fair Value--Expected Losses and Expected Residual Returns.
The Characteristics of a Controlling Financial Interest.
Determining Whether the Reporting Entity Should Consolidate a VIE
Disclosures
Timing of the Assessments
A Look at a Common Arrangement--the Related-party Lease
417 LIQUIDATION BASIS FINANCIAL STATEMENTS
Statement of Net Assets in Liquidation
Statement of Changes in Net Assets in Liquidation.
Disclosures.
APPENDIX 4A: Illustrative Financial Statements
CHAPTER 5: TAX CONSIDERATIONS
500 INTRODUCTION
501 TAX ATTRIBUTES OF THE FORM OF ENTITY
Sole Proprietorship
Partnership
Corporation
Limited Liability Company
502 DEALERSHIP ACCOUNTING ISSUES--TAX AND GAAP TREATMENT
Dealership and Destination Charges
Manufacturer Holdback
Manufacturer Cost Incentive Programs
Floor Plan Assistance Arrangements.
Carrying Parts at Replacement Cost
Specific Inventory Write-downs
General Inventory Loss Provisions
Indirect Inventory-related Costs
Applying LIFO
Dealer Reserve and Financing Income
Chargebacks and Repossession Losses
Insurance Sales
Warranty Contracts
Environmental Cleanup Costs
Supplemental Advertising Fees
Cooperative Advertising Allowances
503 LIFO
General LIFO Considerations
The Dollar-value Approach.
Pricing at Base Costs.
Using the Link-chain Method.
Special Considerations for New Vehicles
Traditional Link-chain LIFO Method for New Vehicles
Worksheet 1--Details of Car or Truck Models.
Worksheet 2--Current-year Cost Indexes for Car or Truck Models.
Worksheet 3--Current-year Cost Index for the Cars or Trucks Pool.
Worksheet 4--LIFO Computation for Cars and Trucks.
Alternative Method under Rev. Proc. 97-36
Worksheet 1--Details of Car or Truck Models.
Worksheet 2--Current-year Cost Indexes for Car or Truck Models.
Worksheet 3--Current-year Cost Index for the Cars or Trucks Pool.
Worksheet 4--LIFO Computation for Cars and Trucks.
Cost-effective New Vehicle LIFO Calculations for Clients
Alternative LIFO Method for Valuing Used Vehicle Inventories
Parts
Using Manufacturer Software That Eliminates the Need for Sampling.
An Efficient, Easy-to-use Sampling Approach.
LIFO Elections and Changes
A New Dealership.
Changing to LIFO from Another Method.
Changing from the Traditional Link-chain Method to the Alternative Method for New Vehicles.
LIFO Terminations
IRS Conformity Regulations
Permitted Differences between Financial Statement and Income Tax Reporting.
Modifying Monthly Statements to Ensure Conformity.
Electing S Status
Managing Inventory Levels to Maximize the Tax Savings from LIFO
Discontinued Lines
504 VALUING USED VEHICLES AT THE LOWER OF COST OR MARKET
505 APPLYING IRC SEC. 263A
FIFO Considerations
LIFO Considerations
506 EXTENDED WARRANTY CONTRACTS
Warrantor Contracts
Gathering the Information Needed.
The Calculations.
Self-funded Arrangements
Reinsurance Companies
507 ENVIRONMENTAL CLEANUP COSTS
508 OTHER TAX CONSIDERATIONS
Form 8300 Cash Reporting
Excise Taxes
Luxury Tax.
Ozone-depleting Chemical Tax.
Employer-provided Vehicles
Full and Partial Exclusion Methods.
Full Exclusion Method.
Partial Exclusion Method.
When Neither the Full nor the Partial Exclusion Method Applies.
Conclusion.
State Taxes
Electronic Funds Transfer
Payroll Taxes on Incentive Payments
Sales by Used Vehicle Lots to High Credit Risk Lenders
Recovery Periods
Recent Increases in the Section 179 Deduction and Bonus Depreciation
Component Depreciation
Deductibility of Insurance Commissions
509 OTHER TAX ISSUES
Motor Vehicle Service Technician Tool Reimbursement Plans
Use of the Cash Method by Small Dealerships
Retention of Electronic Records
Terminal Rental Adjustment Clauses
Non-compete Agreements
Shareholder Loans and Constructive Dividends
Capitalized Cost Reduction
IRS Audit Guides
APPENDIX 5A: Illustrative Worksheets for Traditional Link-chain LIFO Calculations for New Vehicles
APPENDIX 5A-1: Worksheet 1--Details of Car Models
APPENDIX 5A-2: Worksheet 2--Current-year Cost Indexes for Car Models
APPENDIX 5A-3: Worksheet 3--Current-year Cost Index for the Cars Pool
APPENDIX 5A-4: Worksheet 4--LIFO Computation for Cars and Trucks
APPENDIX 5B: Illustrative Worksheets for Rev. Proc. 97-36 LIFO Calculations
APPENDIX 5B-1: Worksheet 1--Details of Truck Models
APPENDIX 5B-2: Worksheet 2--Current-year Cost Indexes for Truck Models
APPENDIX 5B-3: Worksheet 3--Current-year Cost Index for the Trucks Pool
APPENDIX 5B-4: Worksheet 4--LIFO Computation for Cars and Trucks
APPENDIX 5C: Illustrative Worksheets for Parts LIFO Computations
APPENDIX 5C-1: LIFO Sampling Approach
APPENDIX 5C-2: Worksheet 1--Summary of the Parts LIFO Sample
APPENDIX 5C-3: Worksheet 2--Current-year Cost Index for Parts
DLR-CX-17.4: Confirmation and Correspondence Control
DLR-CX-17.5: Checklist of Records Requested from the Dealership
CONFIRMATION AND CORRESPONDENCE LETTERS (DLR-CL)
DLR-CL-1: Engagement Letters
DLR-CL-1.1: Audit Engagement Letter
DLR-CL-1.2: Engagement Letter Change Order Form
DLR-CL-1.3: Resignation Letter--Drafting Form
DLR-CL-2: Legal Letters
DLR-CL-2.1: Request for Legal Representation--Lawyer Is Requested to Provide Information
DLR-CL-2.2: Request for Legal Representation--Lawyer Is Requested to Confirm Information Provided by Client
DLR-CL-3: Management Representations
DLR-CL-3.1: Management Representation Letter
DLR-CL-3.2: Management Representation Letter When the Current Year Financial Statements Have Been Audited and the Prior Year Financial Statements Have Been Reviewed
DLR-CL-3.3: Summary of Audit Differences
DLR-CL-3.4: Updating Management Representation Letter
DLR-CL-4: Internal Control Communications
DLR-CL-4.1: Communication of Significant Deficiencies
DLR-CL-4.2: Communication of Significant Deficiencies and Material Weaknesses
DLR-CL-4.3: Communication of No Material Weaknesses in a Separate Report
DLR-CL-5: Communication with Those Charged with Governance
DLR-CL-5.1: Communication with Those Charged with Governance during Planning
DLR-CL-5.2: Communication with Those Charged with Governance at or Near the Conclusion of the Audit
DLR-CL-6: Cash Confirmations and Letters
DLR-CL-6.1: Standard Form to Confirm Account Balance Information with Financial Institutions
DLR-CL-6.2: Request for Subsequent Bank Statements
DLR-CL-6.3: Receipt for Cash Counted by the Auditor
DLR-CL-7.6: Confirmation Request for a Bill-and-hold Transaction
DLR-CL-7.7: Confirmation of Note Receivable
DLR-CL-8: Investments and Securities Confirmations and Letters
DLR-CL-8.1: Receipt for Securities Counted by Auditor
DLR-CL-8.2: Confirmation of Securities Held by Brokers
DLR-CL-8.3: Confirmation of Securities Held by a Third Party
DLR-CL-9: Inventory Confirmations and Letters
DLR-CL-9.1: Confirmation of Inventories Held by a Third Party--Listing of Inventories Not Enclosed
DLR-CL-9.2: Confirmation of Inventories Held by a Third Party--Listing of Inventories Enclosed
DLR-CL-10: Payables and Debt Confirmations and Letters
DLR-CL-10.1: Accounts Payable Confirmation
DLR-CL-10.2: Note Payable Confirmation
DLR-CL-10.3: Confirmation of Debt for Which No Written Loan Agreement Exists
DLR-CL-10.4: Confirmation of Mortgage Debt
DLR-CL-10.5: Confirmation of Compensating Balances
DLR-CL-10.6: Confirmation of Line of Credit
DLR-CL-10.7: Confirmation of Contingent Liabilities with Financial Institutions
DLR-CL-10.8: Confirmation of Finance Reserve
DLR-CL-10.9: Confirmation of Floor Plan Liability
DLR-CL-11: Benefit Plan Confirmations and Letters
DLR-CL-11.1: Request for Defined Benefit Plan Information
DLR-CL-11.2: Request for Plan Asset Information--Defined Benefit Pension and Other Postretirement Benefit Plans
DLR-CL-12: Other Confirmations and Letters
DLR-CL-12.1: Standard Confirmation Inquiry for Life Insurance Policies
DLR-CL-12.2: Confirmation of Insurance Coverage (Except Life Insurance)
DLR-CL-12.3: Confirmation of Lease Agreement
DLR-CL-12.4: Related Party Confirmation
DLR-CL-12.5: Data Request Letter
DLR-CL-13: Predecessor/Successor Communications
DLR-CL-13.1: Request for Predecessor Auditor to Release Information to Successor Auditor
DLR-CL-13.2: Letter Granting Successor Auditors Access to Workpapers
DLR-CL-13.3: Client Consent and Acknowledgment Letter
DLR-CL-13.4: Communication with Predecessor Auditor Prior to Final Engagement Acceptance
DLR-CL-13.5: Communication with Predecessor Auditor Prior to Engagement Proposal
DLR-CL-13.6: Request for Representation from Successor Auditor to Predecessor Auditor--Predecessor's Report Is Reissued
DLR-CL-14: Principal and Other Auditor Communications
DLR-CL-14.1: Request for Representations from Other Auditor Who Audits the Financial Statements of a Subsidiary, Division, or Branch
DLR-CL-14.2: Request for Representations from Other Auditor Who Performs Audit Procedures on Certain Elements, Accounts, or Items in Financial Statements
DLR-CL-14.3: Inquiry of Principal Auditor by Other Auditor
DLR-CL-14.4: Principal Auditor's Response to Inquiries from Other Auditor
DLR-CL-14.5: Letter from Principal Auditor to Other Auditors Regarding Related Parties
AUDIT PROGRAMS--CORE (DLR-AP)
DLR-AP-1: Audit Program for General Planning Procedures
Other General Planning Procedures
DLR-AP-2: Audit Program for General Auditing and Completion Procedures
Other General Auditing and Completion Procedures
DLR-AP-3: Audit Program for Cash
DLR-AP-4: Audit Program for Receivables
Other Audit Procedures for Receivables
DLR-AP-5: Audit Program for Inventory
Other Audit Procedures for Inventory
DLR-AP-6: Audit Program for Inventory Observation
Other Audit Procedures for Inventory Observation
DLR-AP-7: Audit Program for Property
Other Audit Procedures for Property
DLR-AP-8: Audit Program for Investments and Derivatives
Other Audit Procedures for Investments and Derivatives
DLR-AP-9: Audit Program for Other Assets
Other Audit Procedures for Other Assets
DLR-AP-10: Audit Program for Accounts Payable and Other Liabilities
Other Audit Procedures for Accounts Payable and Other Liabilities
DLR-AP-11: Audit Program for Notes Payable and Long-term Debt
DLR-AP-12: Audit Program for Income Taxes
DLR-AP-13: Audit Program for Equity
Other Audit Procedures for Equity
DLR-AP-14: Audit Program for the Income Statement
Other Audit Procedures for Income Statement
AUDIT PROGRAMS--SPECIFIED RISK (DLR-AP-S)
DLR-AP-1-S: Audit Program for General Planning Procedures--Specified Risk
DLR-AP-2-S: Audit Program for General Auditing and Completion Procedures--Specified Risk
DLR-AP-3-S: Audit Program for Cash--Specified Risk
DLR-AP-4-S: Audit Program for Receivables--Specified Risk
DLR-AP-5-S: Audit Program for Inventory--Specified Risk
DLR-AP-6-S: Audit Program for Inventory Observation--Specified Risk
DLR-AP-7-S: Audit Program for Property--Specified Risk
DLR-AP-8-S: Audit Program for Investments and Derivatives--Specified Risk
DLR-AP-9-S: Audit Program for Other Assets--Specified Risk
DLR-AP-10-S: Audit Program for Accounts Payable and Other Liabilities--Specified Risk
DLR-AP-11-S: Audit Program for Notes Payable and Long-term Debt--Specified Risk
DLR-AP-12-S: Audit Program for Income Taxes--Specified Risk
DLR-AP-13-S: Audit Program for Equity--Specified Risk
DLR-AP-14-S: Audit Program for the Income Statement--Specified Risk
INITIAL AUDIT PROGRAMS (DLR-IA)
DLR-IA-1: Additional General Planning Procedures for an Initial Audit
DLR-IA-2: Additional General Auditing and Completion Procedures for an Initial Audit
DLR-IA-3: Additional Audit Procedures for Cash Beginning Balance in Initial Audit
DLR-IA-4: Additional Audit Procedures for Receivables Beginning Balance in Initial Audit
DLR-IA-5: Additional Audit Procedures for Inventory Beginning Balance in Initial Audit
DLR-IA-6: Not Used
DLR-IA-7: Additional Audit Procedures for Property Beginning Balance in Initial Audit
DLR-IA-8: Additional Audit Procedures for Investments and Derivatives Beginning Balance in Initial Audit
DLR-IA-9: Additional Audit Procedures for Other Assets Beginning Balance in Initial Audit
DLR-IA-10: Additional Audit Procedures for Accounts Payable and Other Liabilities Beginning Balance in Initial Audit
DLR-IA-11: Additional Audit Procedures for Notes Payable and Long-term Debt Beginning Balance in Initial Audit
DLR-IA-12: Additional Audit Procedures for Income Taxes Beginning Balance in Initial Audit
DLR-IA-13: Additional Audit Procedures for Equity Beginning Balance in Initial Audit
COMPILATION AND REVIEW PRACTICE AIDS (DLR-CR)
DLR-CR-1: Engagement Acceptance Form--Compilation or Review
DLR-CR-2: Checklist for a Step-down Engagement (Audit to Review or Compilation/Review to Compilation)
DLR-CR-5.1: Compilation Procedures, Review, and Approval Form
DLR-CR-5.2: Review Procedures, Review, and Approval Form
DLR-CR-6: Trial Balance Preparation Checklist
DLR-CR-7: Inquiry and Analytical Procedures Program
DLR-CR-8: Reporting Checklists and Illustrative Reports
DLR-CR-8.1: Compilation Reporting Checklist
DLR-CR-8.2: Review Reporting Checklist
DLR-CR-8.3: Standard Dealership Compilation Report
DLR-CR-8.4: Standard Dealership Compilation Report (Substantially all Disclosures Omitted)
DLR-CR-8.5: Standard Dealership Review Report
DLR-CR-9: Illustrative Representation Letters
DLR-CR-10: Routing Instructions for Processing Financial Statements
Continuing Professional Education
CPE & Training Solutions
INDEX
CPE related to these PPC Guides is now available!
New this year, visit Course Finder at trainingcpe.thomson.com to download course materials related to these PPC Guides in PDF format at no cost. For many of these courses, you can also opt to use our new Online Grading Center to submit your completed exams. Click on each title below to view available self-study courses related to these PPC Guides. Also new this year—course materials related to these PPC guides are now available in the CPE tab on Checkpoint!
Now it's easier than ever to meet your CPE requirements with the PPC guidance you use and trust!
The CPE & Training Solutions Online Grading Center gives you easy access to many print-based self-study courses and allows you to complete your CPE exams online for immediate results. Plus, the My Courses feature provides convenient retention and retrieval of your CPE course certificates and completions. Features include:
Immediate 24/7 Grading: Grading is now available 24-hours per day, seven days per week. Submit your final exam for grading at any time, and you’ll get immediate results and certification.
No Express Grading Fee: There’s no additional charge for completing the exam online. You will only be charged the normal course grading fee.
Convenient Retention and Retrieval of CPE Course Completions: CPE Certifications are available for every print course exam you successfully complete in the Online Grading Center.
PPC offers print-based self-study in these topics:
You may access PPC Guide-related course materials at no charge by visiting Course Finder at trainingcpe.thomson.com and searching for PPC Self-Study Print-based courses. Many courses are available for PDF download directly from the Course Finder!
INTRODUCTORY MATERIAL
PREFACE
