Auditing - Chapter 01 - Auditing & Assurance

Business Risk

Risk that an entity will fail to meet its objectives

Information Risk

The probability that the information circulated by a company will be false or misleading. This is why users demand a third party assessment of the information.

Definition of Auditing

Official:

Systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users.

Basically:

Communicating and establishing the level to which economic reports are not misleading

Attestation

Any work of assessing reports on “subject matter” , or an assertion about subject matter that is the responsibility of another party. An audit is an example of an attestation engagement.

Financial Examples of Attestations

Financial

Financial Forecasts & Projections, Examination of management’s discussion and analysis, Pro forma financial information

Non Financial Examples of Attestations

Non Financial

Effectiveness of internal control systems, compliance with environmental regulations, sustainability reporting engagements

Assurance Services

Independent professional services that improve the quality of information, or its context, for decision makers

Examples of Assurance Services

XBRL Reporting

Information Risk Assessment

Customer Satisfaction Surveys

Internal Audit Outsourcing

Fraud and Illegal Acts Prevention & Deference

Cyber Risk Assessment