Defining Attestation, Auditing & Assurance | I.S. Partners, LLC
Explain the relationship among audit services, attestation services, and assurance services, and give examples of each. *Attestation services are a type of. (3) Attest services are a subset of assurance services. (4) Attest and assurance services are different terms to . What are Attestation Services?. View Homework Help - Week 1 - Team Questions (1) from ACC at University of Phoenix. What is the difference between assurance services, attestation.
New and changing business relationships lead to innovative accounting and reporting problems b. Potential impact of transactions not quantifiable, leading to increased disclosures 2. Which one or ones does the auditor reduce by performing an audit? Risk-free interest rate This is approximately the rate the bank could earn by investing in U.
Business risk for the customer This risk reflects the possibility that the business will not be able to repay its loan because of economic or business conditions such as a recession, poor management decisions, or unexpected competition in the industry.
Information risk This risk reflects the possibility that the information upon which the business risk decision was made was inaccurate. A likely cause of the information risk is the possibility of inaccurate financial statements.
Auditing has no effect on either the risk-free interest rate or business risk. However, auditing can significantly reduce information risk. What are the advantages and disadvantages of each? The four primary causes of information risk are remoteness of information, biases and motives of the provider, voluminous data, and the existence of complex exchange transactions.
- Learn What Attestation, Assurance and Auditing Means in the CPA Industry
The three main ways to reduce information risk are: User verifies the information. User shares the information risk with management.
Audited financial statements are provided. The advantages and disadvantages of each are as follows: User obtains information desired. User can be more confident of the qualifications and activities of the person getting the information. High cost of obtaining information.
What is the difference between Assurance and Attestation in auditing?
Inconvenience to the person providing the information because large number of users would be on premises. User may not be able to collect on losses. No audit costs incurred. Multiple users obtain the information. Information risk can usually be reduced sufficiently to satisfy users at reasonable cost. Minimal inconvenience to management by having only one auditor. May not meet needs of certain users. Cost may be higher than the benefits in some situations, such as for a small company.Auditing and Assurance Services Chapter 4 (Professional Ethics)
To do an audit, there must be information in a verifiable form and some standards criteria by which the auditor can evaluate the information. Examples of established criteria include generally accepted accounting principles and the Internal Revenue Code. Determining the degree of correspondence between information and established criteria is determining whether a given set of information is in accordance with the established criteria.
The information for Jones Company's tax return is the federal tax returns filed by the company. The established criteria are found in the Internal Revenue Code and all interpretations. For the audit of Jones Company's financial statements the information is the financial statements being audited and the established criteria are generally accepted accounting principles.
The primary evidence the internal revenue agent will use in the audit of the Jones Company's tax return include all available documentation and other information available in Jones' office or from other sources.
For example, when the internal revenue agent audits taxable income, a major source of information will be bank statements, the cash receipts journal and deposit slips. The internal revenue agent is likely to emphasize unrecorded receipts and revenues. For expenses, major sources of evidence are likely to be cancelled checks, vendors' invoices and other supporting documentation. However, many competent accountants do not have an understanding of the auditing process.
Then the organization can seek an attestation to the reported information. The attestation engagement examines the issue to check if it truly falls outside the parameters of the compliance standard as an opinion is given about the compliance issue.
What is the difference between Assurance and Attestation in auditing? - misjon.info
Then the business can take the necessary steps to bring their operations back into compliance as well as set risk management policies in place to prevent the issue from reoccurring. Building Confidence by Examining the Credibility of Information When companies do business with other organizations, trying to raise money from outside investors, or are even engaging in merger deals, they need to be reassured that the data and information presented is accurate and credible.
This instance is when assurance services come into play. Assurance work provided by a certified public accountant aims to substantiate the data that is presented. The accountant will give their opinion regarding the information that can be used by the company to make a decision.
Differences in assurance, attestation and auditing services
So an investor may ask for assurance work to check the financial information in regards to a company that has asked for funding. The certified public account would review the gathered information and put it through given procedures before providing a report so that the investor can trust the given data before agreeing to the financial transaction.
An assurance service basically provides three main goals for an organization: A company may want to check to ensure all financial information is accurate. They may also desire assurance services to see if a company abides by all established regulations and compliance standards.
Getting Reliable Auditing, Attestation and Assurance Services Using an independent third-party to perform auditing, attestation and assurance services can ensure that you receive unbiased reports and informative opinions in regards to the procedures, protocols, internal systems and accounting data used throughout your organization.
Partners, LLC is a certified public accountant firm who offers these services to a range of organizations so they can better manage operational risks and stay in compliance with regulations so the business can increase their profits.
We can provide SOC 1 servicesIT assurance and compliance services to meet the demanding needs of your business. Contact our firm today by sending us a message or calling us at to learn more about our work.