EBK AUDITING+ASSURANCE SERVICES
17th Edition
ISBN: 9780135171219
Author: ARENS
Publisher: PEARSON CO
expand_more
expand_more
format_list_bulleted
Question
Chapter 25, Problem 1RQ
To determine
Explain level of assurance and how does it differ for audit of financial statements, a review, compliance and preparation engagement.
Expert Solution & Answer
Explanation of Solution
Level of assurance is the level of comfort the preparer of the financial statements are being provided while preparing the financial statements. It is also a tool to measure the reliability of the financial statements.
Following is the level of assurance in the given scenarios:
- In audit, the level of assurance is very high as the audit involves in-depth checking of the financial statements along with its internal controls.
- In reviewing the service engagement, the accountant expresses that the financial statements prepared are in compliance with the relevant standards. Since, only the accountant does the review and thus, engagement provides the least level of assurance.
- In a compliance service agreement, accountant applies accounting information to assist the management in preparation of financial statements and its related notes to accountant. Both,
management and accountant are engaged in preparation and reviewing of the financial statements and thus, the level of assurance is a little higher. - In preparation of the review standards, the CPA is involved actively in preparation of the financial statements. Thus, it is the second most level of reliable factor after audit of financial statements.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
What is meant by the term level of assurance? How does thelevel of assurance differ for an audit of historical financial statements, a review, and acompilation?
In what ways are assurance services similar to attestation services (including audits of financial statements)?
What is the major difference between auditing services and assurance services?
Chapter 25 Solutions
EBK AUDITING+ASSURANCE SERVICES
Ch. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Prob. 9RQCh. 25 - Prob. 10RQ
Ch. 25 - You have been asked to provide assurance on...Ch. 25 - Prob. 12RQCh. 25 - Prob. 13RQCh. 25 - Prob. 14RQCh. 25 - Prob. 15RQCh. 25 - Explain what is meant by prospective financial...Ch. 25 - Prob. 17RQCh. 25 - Prob. 18.1MCQCh. 25 - Prob. 18.2MCQCh. 25 - Prob. 18.3MCQCh. 25 - Prob. 19.1MCQCh. 25 - Prob. 19.2MCQCh. 25 - Prob. 20.1MCQCh. 25 - Prob. 20.2MCQCh. 25 - Prob. 21.1MCQCh. 25 - Prob. 21.2MCQCh. 25 - Prob. 21.3MCQCh. 25 - You are doing a review services and related tax...Ch. 25 - Prob. 23DQPCh. 25 - Prob. 24DQPCh. 25 - Prob. 25DQPCh. 25 - Prob. 27DQPCh. 25 - Prob. 28DQPCh. 25 - Prob. 29DQPCh. 25 - Prob. 30DQP
Knowledge Booster
Similar questions
- Explain the concept of “Reasonable Assurance” in the context of financial statement audit.arrow_forwardhat does the standard audit report indicate about the audit's scope and the financial statement (i.e., whether or not it is presented fairly)?arrow_forwardHow do contingent liabilities effect the audit?arrow_forward
- how key audit matters affect the model of the audit report?arrow_forwardHow does a very material GAAP issue affect the Audit Report?arrow_forwardPlease discuss the audit process focusing on the concept of materiality in the audit plan, interpretation of financial ratios, as well as documentation and sampling in respect of audit evidence?arrow_forward
- How does the quality of audit evidence vary depending on who has provided it?arrow_forwardwhen auditing VAT payable account, what are the considerations that you need to remember and procedures that you need to do say that you have gained a reasonable assurance of its compliance with standards and regulatory protocols?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:CengageAuditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College PubAuditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
- Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,