Summary of Auditing Theory Chap 1 & 2
Assurance services - deal with audit or review of historical financial information and assurances dealing with subject matters other than historical financial information. * designed to enhance the degree of confindence of the intended users other than the responsible party about the outcome of the evaluation or measurement of a subject matter against criteria
FF. are the broad categories of services under the umbrella of assurance services:
1. Risk assessment
2. Information system reliability
3. Adequacy of security over Electronic commerce transactions, electronic documents, and support systems
4. Effectiveness of Health care performance measurement systems
5. Reliability and relevance of Business performance measurement
* it evolves naturally from Attestation services, which in turn evolve from audit * The root of all three is independent verification
Non-assurance services (Related Services) – pertain to compilation of financial information , agreed-upon-procedures and other related services which do not result in the expression of conclusion that provides a level of assurance.
Auditing – is a systematic process of objectively obtaining and evaluating evidence regarding selected assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the result to interested users. * determining whether recorded information properly reflects the economic events that occurred during the accounting period.
Elements:
* Systematic process * Objectivity * Obtaining and evaluating evidence * Assertions about economic actions and events * Degree of correspondence...established criteria * Communicating results * Interested users
Attestation - refers to an expert’s written communication of a conclusion about the reliability of someone else’s assertions. * when a practitioner is engaged to issue a written communication that
FF. are the broad categories of services under the umbrella of assurance services:
1. Risk assessment
2. Information system reliability
3. Adequacy of security over Electronic commerce transactions, electronic documents, and support systems
4. Effectiveness of Health care performance measurement systems
5. Reliability and relevance of Business performance measurement
* it evolves naturally from Attestation services, which in turn evolve from audit * The root of all three is independent verification
Non-assurance services (Related Services) – pertain to compilation of financial information , agreed-upon-procedures and other related services which do not result in the expression of conclusion that provides a level of assurance.
Auditing – is a systematic process of objectively obtaining and evaluating evidence regarding selected assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the result to interested users. * determining whether recorded information properly reflects the economic events that occurred during the accounting period.
Elements:
* Systematic process * Objectivity * Obtaining and evaluating evidence * Assertions about economic actions and events * Degree of correspondence...established criteria * Communicating results * Interested users
Attestation - refers to an expert’s written communication of a conclusion about the reliability of someone else’s assertions. * when a practitioner is engaged to issue a written communication that