Name: Vinna P. Zabate
Topic: Assurance vs. Non-Assurance Engagements
The thing about audit is …
Myth vs Fact
The objective of audit is to express an opinion
on the fair presentation of the financial
statements.
Myth:
Audit is a review of financial statements.
The objective of review is to enable the CPA
to report whether anything has come to his
attention that would indicate that the financial
statements are not presented fairly.
Fact:
Audit is a systematic process of evaluating
evidence regarding assertions.
The objective of agreed-upon procedures is to
carry out audit procedures agreed on with the
client and any appropriate third parties
identified in the report.
The objective of compilation is to assist the
client in the preparation of financial
statements.
The difference between audit, review, agreedupon procedures, and compilation in terms of
level of assurance is that only audit has high or
reasonable assurance, while review has
moderate or limited assurance, and both
agreed-upon procedures and compilation have
none.
The elements of assurance Engagement are the
following:
a. A three-party relationship
b. An appropriate subject matter
c. Suitable criteria
d. Sufficient appropriate evidence
e. A written assurance report
An audit is an attestation engagement, which
means it is an assurance service.
The things I need more explanation.
Related services for assurance engagements
Non-assurance engagements
Source of Information
Auditing Theory by Jekell G. Salosagcol,
CPA; Michael F. Tiu, CPA; and Roel
Hermosilla, CPA, MBA, LLB