Overview of Audit and Engagement Standards

Flashcards on Audit and Engagement Standards

Assurance services

Independent professional services in which a practitioner issues a written communication that 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.

Assurance engagement

An engagement in which a 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.

Reasonable assurance engagements

Engagements that provide high, but not absolute, level of assurance. Also called high-level engagements.

Limited assurance engagements

Engagements that provide only a “moderate” or “limited” level of assurance.

Assertion based engagements

Evaluation or measurement of the subject matter is performed by the responsible party, and the subject matter information is in the form of an assertion by the responsible party that is made available to the interested users. Also known as attestation engagements.

Direct reporting engagements

The practitioner either directly performs the evaluation or measurement of the subject matter or obtains a representation from the responsible party that has performed the evaluation or measurement that is not available to the intended users.

Practitioner

CPA in public practice who performs the assurance engagement.

Responsible party

Person/s who is responsible for the subject matter or the assertion (subject matter information).

Intended user/s

Person, persons or class of persons for whom the practitioner prepares the assurance report; they are the users to whom the practitioner usually addresses the report.

Subject matter

Refers to the information to be evaluated or measured against the criteria.

Criteria

The standard or benchmark used to evaluate or measure the subject matter of an assurance engagement, including, where relevant, benchmarks for presentation and disclosure.

Professional skepticism

An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of evidence.

Evidence

Refers to the information obtained by the practitioner in arriving at the conclusions on which the conclusion is based.

Attestation service

A type of assurance service in which a practitioner is engaged to issue a written communication that expresses a conclusion about the reliability of a written assertion that is the responsibility of another party.

Non-assurance Engagements

Those that do not result in the practitioner’s expression of a conclusion that provides a level of assurance, whether negative assurance or other form of assurance.

Tax compliance

Includes the preparation of tax returns and acting as client’s representative to tax authorities or in tax litigations.

Tax planning

Includes the determination of the tax consequences of planned or potential transactions followed by making suggestions on the most desirable course of action.

Management advisory (consulting) services

Refers to the function of providing professional advisory (consulting) services, the primary purpose of which is to improve client’s use of its capabilities and resources to achieve the objectives of the organization.

Philippine Standards on Quality Control (PSQCs)

To be applied for all services that fall under the AASC’s engagement standards, namely, audit, review, other assurance, and related services.

Philippine Framework for Assurance Engagements

Defines and describes the elements and objectives of an assurance engagement.