...events in a logical manner for the purpose of providing financial information for decision making Assurance service — an independent professional service that improves the quality of information for decision makers Attestation service — a type of assurance service in which the CPA firm issues a report about a subject matter or assertion that is the responsibility of another party Audit of historical financial statements — a form of attestation service in which the auditor issues a written report stating whether the financial statements are in material conformity with accounting standards Audit report — the communication of audit findings to users Auditing — the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria Certified public accountant — a person who has met state regulatory requirements, including passing the Uniform CPA Examination, and has thus been certified; a CPA may have as his or her primary responsibility the performance of the audit function on published historical financial statements of commercial and noncommercial financial entities Compliance audit — (1) a review of an organization’s financial records performed to determine whether the organization is following specific procedures, rules, or regulations set by some higher authority; (2) an audit performed to determine whether an entity that receives financial assistance from the federal government...
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...Audit, Attestation, and Assurance Services ACC491 Kimberly Johnson December 14, 2015 Audits, assurance services, and attest services are all work that could be performed by an auditor. Each category offers a range of services that could be beneficial to many companies, and all help in regulating a company’s financial documents. Audit Services There are 3 different types of audits, financial statement audit, compliance audit, and operational audit. A financial statement audit involves obtaining and evaluating evidence about a company’s presentation of their financial position, operation results, and cash flows. This audit is to ensure that the company is following all GAAP guidelines of reporting. In most states a CPA must complete these types of audits, and generally companies will hire an external auditor to perform this type of audit as the data is distributed to stockholders, creditors, regulatory agencies, and the general public. Compliance audits also involve obtaining and evaluating evidence to determine if financial or operating activities conform to specified conditions, rules, or regulations. Operational audits are to determine the efficiency and effectiveness of a company’s operating activities in relation to specified objectives. This type of audit is referred to as a performance audit or a management audit. Assurance Services Assurance services are a broader term that includes audits and other assurances about representation of management. Assurance services...
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... | Copyright © 2009, 2008, 2007 by University of Phoenix. All rights reserved. Course Description In this course, students focus on the auditing practice performed by public accountants. Topics include the CPA profession and the auditor’s role, planning the audit, audit reporting and required communications, evaluating internal controls, audit programs for current assets and liabilities, and audit programs for other business cycles. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality. Course Materials Arens, A. A., Elder, R. J., & Beasley, M. S. (2006). Auditing and assurance services: An integrated approach (11th ed.). New York, NY: Pearson. Hayes, R., Dassen, R., Schilder, A., & Wallage,...
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...HUISWERK WEEK 3 (E6 C32 & E8 C39) + OPGAVE E7 DQP 29 & 31 Case 6-32 a. A review provides limited assurance about the fair presentation of financial statements in accordance with generally accepted accounting principles but far less assurance than an audit. Presumably, the bank decided that the assurances provided by a review were needed before a loan could be approved, but an audit was not necessary. A review includes a CPA firm performing analytical procedures, making inquiries about the fair presentation of the statements, and examining the information for reasonableness. Because of a CPA firm’s expertise in accounting, the accountant from the CPA firm can often identify incorrect presentations in the financial statements that have been overlooked by the accountant of the company. Reviews are common for smaller privately-held companies with relatively small amounts of debt. The bank probably did not require an audit because the additional cost of an audit was greater than the benefit the bank perceived. In many cases, the decision as to whether to have a review or an audit is negotiated between the company seeking a loan and the bank loan officer. Both the company and the bank have options in negotiating such things as the amount of the loan, the rate of interest, and whether to require an audit or a review. The bank can reject the loan request and the company can go to other banks that want to make loans. Frequently, banks have a list of CPA firms in which they...
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...Shoes, Inc. and complete the assessment for the year ending on December 31, 2011. Our team associates would like to attest the audit objectives, terms, limitations, and various services provided for this engagement. Our services will include auditing financial statements such as income statement, balance sheets, statement of retained earnings, and the statement of cash flows. The financial audits will make sure that financial statements are in accordance to General Accepted Accounting Principles (GAAP). As we all know, investors, creditors, managers, and government agencies use these statements. Additionally, our team checks and evaluate the operational performance by learning particular areas of the organization, its significance and effectiveness. Anderson, Olds, & Watershed will provide sensible, but not complete, assurance services that are being carry out by professional auditors to enhance the reliability of internal controls, IT systems, financial statements, compliance with regulation, and human resources practices. Our auditors will state finale information that will increase the assurance of creditors, bankers, and management. One of the assurance services offers by our firm is attestation services. “An attestation service is a type of assurance service in which the CPA firm issues a report about the reliability of an assertion that is made by another party. Attestation...
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...Shoes, Inc. Audit Report The audit firm of Anderson, Olds, and Watershed, CPA (AOW) has been engaged by Apollo Shoes, Inc. to audit the financial statements for the fiscal year ending December 31, 2007, and file the Form 10-k with the SEC within 60 days of this date. It has also been agreed that AOW will prepare the state franchise tax and federal tax returns for Apollo Shoes, Inc. The field work for the audit will begin mid-January, with the trial balance to be sent to AOW shortly after the end of December. The AOW staff assigned to the audit will work closely with Katrina Ramirez, the Internal Auditor for Apollo Shoes. This brief contains additional information regarding the auditing and assurance services offered by AOW that Apollo Shoes may find beneficial now or in the future, an explanation of the role AOW will take on in the aforementioned engagement, and a description of the requirements on AOW to meet the standards for these offered services. Auditing and Assurance Services The management of Apollo Shoes can expect the highest level of service from AOW. AOW offers a variety of assurance and audit services, as well as a variety of accounting services, to meet the financial and accounting needs of its clients. One type of assurance service the company is able to provide is an attestation service “in which the CPA firm issues a report about the reliability of an assertion that is made by another party” (Arens, Elder, & Beasley, 2012, p. 9). These assurance services...
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...updated global standard issued by the International Federation of Accountants, combined with the rigour of the Sarbanes-Oxley legislation and SEC requirements for public companies in the United States. The core principle of the new standard is that every effort must be made to eliminate all real or perceived threats to auditors’ independence. Development of the new independence standard began in June 2001, after an Independence Forum of auditors, regulators, academics, analysts and financial statement preparers held by the Public Interest and Integrity Committee (PIIC) concluded that the PIIC should develop a uniquely Canadian independence standard that would be based on the international standard, and incorporate the SEC requirements for audits of public companies. The new standard was first released for public comment in September, 2002, and became effective for engagements starting after December 31, 2003. The standard marks a shift to a more rigorous ‘principles-based’ approach, meaning its applicability goes beyond any specific situation and mandates a proactive approach, based on clearly articulated principles. It contains a framework that describes apparent and actual threats to auditor independence. The standard also recognizes that there are certain activities for which there are no adequate safeguards, so it prohibits specified activities and relationships. Overview The standard provides a framework for auditors to apply in...
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...April 23, 2012 Eric Unum, Vice-President-Finance, Apollo Shoes Inc., 100 Shoe Plaza, Shoetown, ME 00001 Dear Sir, Thank you for considering our firm to perform audit and assurance services for your company. My partners and associates are respected in the market and pride themselves with delivering the best quality of services to our clients. We use standardize audit resources and impeccable services by building relationships with our clients offering excellence in assurance, professional conduct, and independence. We approach audits first by understanding the clients business, accumulate data, evaluate data, assess risk factor, and audit and test procedures; making sure all issues are in compliance with the rules and regulations defined by Security Exchange Commissions (SEC). Our assurance programs have various auditing and attesting categories that your company can select. We concentrate in auditing services based upon your need in the areas of system audit, product and services audit, department audit, conformance audit, compliance audit, and process audit. We approach each audit through the evaluation of internal control, analyzing procedures, and applying the best strategic systems approach to auditing. I get involved on the high level assurance valuation in planning and audit procedures process, check and balances in place with control issues, and assist auditors and experts with any analysis questionable. I also involved myself in the final evaluation...
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...Auditing Fall 2015 ACCT 412A – MWF 1:00 – OLIN 220 Instructor: Diane Slider Farley Office: Olin 110 Email: farleyds@wofford.edu Phone: 597-4530 Course Description and Goals This course is an introduction to auditing and assurance services. We will learn why there is a demand for audits and the basic steps involved in performing an audit. We will apply auditing concepts to cases throughout the semester. Although many concepts must be committed to memory, our focus will be on understanding why certain standards exist, rather than rote memorization of auditing guidance. By the end of the course, students will be able to: 1. Understand the basic concept of assurance services and describe a financial statement audit 2. Explain basic auditing concepts, including audit planning, audit tests, materiality, audit evidence, and audit documentation 3. Prepare a risk assessment 4. Understand the impact of internal controls on financial reporting 5. Describe an audit of the revenue process 6. Exercise professional judgment 7. Explain the steps involved in completing an engagement and issuing an audit report Textbook Auditing and Assurance Services: A Systematic Approach, 9th edition, Messier, Glover and Prawitt, McGraw-Hill/Irwin, 2014. Office Hours I will hold the following office hours each week: • Monday 9:30 – 10:20 and 2:00 – 3:00 • Tuesday 9:30 – 10:20 and 1:00 – 2:00 • Wednesday 9:30 – 10:20 and 2:00...
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...case is based on the practical experience from ‘real world’ situation that is applicable to all business organization. It is making us familiar with real experience. We now know what kind of fraud is taking place in organization, how we can prevent them, how we improve breakdowns, what kind of process should an auditor follows to discover fraud, all of this will help us further carrier as an auditor Dhaka April 2011. Neaz Executive Summary An audit is an examination of a company’s financial statements prepared by the directors of the company. Its purpose is to give the company’s owners an independent, professional and informed opinion stating. Assurance services are a class of services provided by certified public accountants (CPAs) in public practice. While the term is sometimes used inconsistently among individual CPA firms, the American Institute of Certified Public Accountants (AICPA) Special Committee on...
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...entity being audited. C. they are paid by parties outside of the audited entity. D. they report to users outside of the audited entity 5:B 12.Independent auditors perform audits on the financial reports of public companies. This type of auditing can best be described as: A.a discipline that assures financial information presented by management. B.an activity whose purpose is to search for irregularities. C.a regulatory function that prevents the issuance of improper financial information. D.a professional activity that measures and communicates financial and business data. 12: A 17. Which of the following statements is not true concerning assurance services? A. Assurance services focus on improving the quality of information, or its context, for decision makers. B. The growth in assurance services has been driven in part by users' demands for more relevant and reliable information. C. Auditing services can be viewed as a subset of assurance services. D. Unlike audit engagements, an engagement to perform assurance services does not require the auditor to consider information reliability. 17: D 23.The primary responsibility for the adequacy of disclosures in the financial report of a publicly held company rests with the: A.management of the company. B.partner assigned to the audit engagement. C.Securities and Exchange Commission. D.auditor in charge of the fieldwork. 23: A 29. Which of the following best describes why an independent auditor is asked to...
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...comply with growing regulatory mandates. This pressures internal auditors to provide more timely and ongoing assurance that controls are working effectively and risk is being mitigated. Today, IAs use continuous auditing as a method to perform control and risk assessments automatically on a more frequent basis. According to Canadian Institute of Chartered Accountants (CICA) and the American Institute of Certified Public Accountants (AICPA), Continuous Auditing is defined as a methodology that enables independent auditors (both internal & external) to provide written assurance on a subject matter using a series of auditors’ reports issued simultaneously with, or a short period of time after, the occurrence of events underlying the subject matter (Searcy and Woodroof, 2003). The Institute of Internal Auditors' (IIA) Global Technology Audit Guide (GTAG 3) defined continuous auditing as any method used by auditors to perform audit-related activities (including control and risk assessments) on a more continuous (occurring without interruption) or continual (occurring at repeated intervals.) basis. Continuous auditing requires specialized skills of audit personnel to monitor information electronically and incorporate the use of intelligent agents, computer modeling, and other software tools. Continuous auditing also gives end users of information more timely assurance that the information is correct and may eventually lead to continuous reporting where financial information...
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...business, they will demand to have this report verified by a third independent party. * Agency theory goes on to suggest that the appointment of professional external auditors is the most preferred cost effective way of monitoring the agents. * Under strict agency theory, financial reports are thus regarded as reports to owners of the business who are the principals and the external auditor is seen to act for and on behalf of the owners. DEFINITION OF AUDIT STATEMENT OF AUDITING STANDARDS-GLOSSARY OF TERMS issued by the Auditing Practices Board defines an Audit as; “ An exercise whose objective is to enable auditors to express an opinion whether the financial statements give a true and fair view of the entity`s affairs at the end of a period and its profit or loss for the period then ended and have been properly prepared in accordance with the applicable reporting framework” PARTIES TO THE AUDIT PROCES The American Accounting Association suggests that there are four parties to the accountability/audit process; The Preparer/Source- This refers to those individuals who have control of the resources that have been provided by other parties and have the responsibility for preparing the accounting reports that show the position and results of the activities controlled by them. Users of accounting...
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...Assurance on sustainability reports: An International Comparison (1) Archival study ! global compustat I. Abstract Identify the factors associated with: Decision to voluntary purchase assurance The choice of the assurance provider A company needs to enhance credibility through assurance and choice of assurance provider will be a function of company, industry and country related factors. Findings: Companies seeking to enhance the credibility of their reports and build their corporate reputation are more likely to have their sustainability reports assured, although it doesn’t matter whether the assurance provider comes from the auditing profession. Companies domiciled in more stakeholder-oriented countries are more likely to choose a member of the auditing profession II. Introduction Purpose ! understand emerging assurance market and the role of assurance in establishing corporate credibility Why buy assurance? Increased stakeholder or user confidence in the quality of the sustainability information provided Increased stakeholder trust in the level of organizational commitment to sustainability agendas III. Literature review on voluntary assurance Why report? Informing stakeholders ! reducing information asymmetry Reporting also attests to organizational commitment, risk management, and a desire to build a corporate reputation Demand for assurance stems from the need to mitigate information asymmetry with institutional creditors. The auditing profession has well developed global...
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...ASSESSING THE EFFECTIVENESS OF INTERNAL CONTROL SYSTEM Ascertaining Internal Control System Methods of ascertaining the control systems are summarized as follows: * Examining previous audit work, * Client’s own documentation of the system, * Interviews with client’s staff, * Tracing transactions, * Examining client’s documents, * Observation of procedures. a. Examining previous audit work: The audit work should provide a record of the previous audit and how the system operates. Any change in the audit work should be documented for updating. b. Clients own documentation of the system: Some organizations have their on Standard Operating Procedures (SOP). These Standard Operating Procedures provides source of information and to the existing control systems. It is therefore important to check whether the system as described in the (SOP) is what actually practiced. c. Interview with staff: During various stages of the audit, the auditor will need to some members of the staff of the client and find out how they carry out the assigned duties. These questions will reveal existing control and give indication of potential problems. d. Tracing transactions: Walk through checks allow auditors to identify any examples of actual procedures that vary from intended procedures. It also helps the understanding of the entire process as well as identification of risks. e. Examining client’s documents: The auditor can also ascertain the...
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