Auditing and Assurance - an Overview

2611 Words11 Pages
Chapter 1 – Assurance and Auditing an Overview
The Framework for Assurance Engagements * The framework defines an assurance engagement as ‘an engagement in which an assurance practitioner expresses a conclusion designed to enhance the degree of confidence of the intended users other than the responsible party about the outcome of the evaluation or measurement of a subject matter against criteria * The following five elements of assurance engagement are identified 1. Three party relationships – between the practitioner (auditor), responsible party, intended user 2. Subject matter – financial position and performance, non-financial performance, physical characteristics, systems and processes, behavior 3. Subject
…show more content…
vel, and this is associated with a positively expressed assurance opinion * The objective of a limited assurance engagement is a reduction in assurance engagement risk to a level that is acceptable in the circumstances and this is associated with a negatively expressed assurance opinion, such as that nothing has come to the auditor’s attention to persuade them that the information has been materially misstated * A significant difference between a related services engagement and an assurance engagement is that the auditor does not have the discretion to undertake evidence collection procedures outside those that have been agreed upon * The auditor therefore only issues a report of factual findings to the parties that have agreed to the procedures being performed, in which no conclusion is communicated and which therefore expresses no assurance * An assertion based assurance engagement requires the auditor to issue an opinion on written assertions made y others * A direct reporting assurance engagement requires the auditor to provide assurance on the accountability matter on which the responsible party has not made a written assertion

Auditing Defined * ASA 200.11 provides the objectives of the auditor in undertaking an audit of a financial report * The definition developed by the American Accounting Association is ‘ a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events
Get Access