Auditing, Attestation, and Assurance Services

Topics: Auditing, Public Company Accounting Oversight Board, Audit Pages: 2 (599 words) Published: October 25, 2010
Auditing is the term used to describe the process of obtaining objective evidence as to the reliability and integrity of financial information or statements. It includes procedures such as testing systems and gathering evidence. Inquiry is another important procedure in addition to analytical tests of records and systems.

Attestation is the reporting of the results analyzed and confirmed in the auditing process. A CPA involved in an attest engagement will issue a written report and take responsibility as to the fairness of the information presented. There are levels of responsibility including three standard types: an examination is referred to as an audit, a review which is less in scope, and an agreed-upon-procedures report. Agreed-upon-procedures are listed and the results are reported for each procedure as designed.

Assurance is very much like an audit except that it usually used to verify a certain financial issue project. As with all attestation functions, independence is the backbone of the assurance procedure. The difference is that assurance reports are not necessarily a historical set of facts. They could be used to project or forecast the effects of certain transactions. Assurance services may include risk assessment, reliability of systems, business performance measurement, or compliance with policies. It is obviously a specific examination and a specific report.

Both attestation and assurance services could be directly requested by companies either for compliance with regulations (SEC, shareholders, banks, insurance companies, attorneys, courts, government agencies) or for more internal purposes. Companies may request independent verification for internal procedures, for projection of success or failure of ventures, for testing or prevention of fraud, for a business valuation, for efficiency of systems, and for information and expertise. Outsiders may request reports including bankruptcy courts, potential buyers, FBI, EPA, IRS,...
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