Professional Documents
Culture Documents
FOR A SSURANCE
2
What ?
Is this ok?
It Looks ok
to me.
Why ?
Increase
confidence Assurance Services Reduce
Risk
Of the user
Assurance
Sufficient
Appropriate
Three Party A subject Suitable Evidence to A Written
Relationship matter Criteria Support the Report
Assurance
Opinion
Practitioner
Examines
Reports to
Intended users
Amin Siddiki FCA
10
The responsible
The practitioner party (the person(s)
The intended users
(accountant i.e. who prepared the
(stakeholders)
auditor) subject matter i.e. the
management)
Shareholders Slicegp
Lenders
Investors
Customer
Employee
Government and their Agent
Public at large
Subject Matter
Behavior (for
Data (for example, Systems or
example, social and
financial processes (for
environmental
statements or example, internal
performance or
business control systems or
corporate
projections) computer systems)
governance)
Suitable Criteria
• The person providing the assurance must have something
by which to judge whether the information is reliable and
can be trusted. So for example, in an assurance engagement
relating to financial statements, the criteria might be
accounting standards (e.g. BAS). The practitioner will be
able to test whether the financial statements have been put
together in accordance with accounting standards and if
they have, then the practitioner can conclude that there is a
degree of assurance that they are reliable.
Level of Assurance
Level of Assurance
Audit Engagement
Some thoughts
Audit enhances credibility.
Will not guarantee future viability.
Does not guarantee efficiency and effectiveness.
Gives reasonable but not absolute assurance.
Inherent limitations in audit could affect auditor’s
ability to detect fraud.
Audit work open to subjective judgement.
Objective:
The objective of an audit of financial statements is to
enable the auditor to express an opinion whether the
financial statements are prepared, in all material
respects, in accordance with an applicable financial
reporting framework.
Sufficient
Three Party A subject Suitable Appropriate A Written
Relationship matter Criteria Evidence to Report
Support the
Assurance
Opinion
The shareholders
(users) Law and An
The accounting assurance
financial standards Audit
The board of evidence report
directors (the statements issued in a
responsible party) prescribed
form.
The audit firm (the
practitioner)
Assurance
Service
Audit
The Companies Act 1994 also sets out factors which make a person
ineligible for being a company auditor, for example, if he or she is:
Professional Requirements
The Principles are
1. Integrity
2. Objectivity
3. Professional Competence and Due Care
4. Confidentiality
5. Professional Behavior
Benefits of Assurance
Key Benefit
This is often because users are not aware of the nature of the
limitations on assurance provisions, or do not understand
them and believe that the assurance provider is offering a
service (such as a guarantee of correctness) which is in fact he
is not. The distinction between reasonable and limited
assurance may also be misunderstood by users.