Audit Theory

TBC

Assurance services/engagement

designed to enhance the degree of confidence of the intended users other than the responsible party

General objective of ASSURANCE engagement

ENHANCE THE CREDIBILITY OF INFORMATION about the outcome of the evaluation or measurement of a subject matter against criteria

Objective of ASSURANCE engagement

Provide HIGH and MODERATE level of assurance

REASONABLE assurance engagement

LIMITED assurance engagements

Types of ASSURANCE engagements

REASONABLE assurance engagement / HIGH level

engagements that provide HIGH, but NOT ABSOLUTE, level of assurance.

LIMITED assurance engagements

engagements that provide only a “moderate” level of assurance.

Assertion based engagements / attestation engagements

evaluation or measurement of the subject matter is performed by the responsible party

Direct reporting engagements

practitioner directly performs the evaluation or measurement of the subject matter

practitioner obtains a representation from the responsible party that has performed the evaluation

Suitable criteria

Written assurance report

Appropriate subject matter

Three party relationship

Sufficient appropriate evidence

Elements of Assurance Engagements

Practitioner

Performs the assurance engagment

Responsible party

Responsible for the subject matter or assertion

Intended user/s

Whom the practitioner prepares the assurance report, usually addressed in said report

Subject matter

Information to be evaluated

Subject matter information

Outcome of the evaluation

Financial performance or conditions

Non-financial performance or condition

Physical characteristics

Systems and processes

Behavior

Forms of subject matter of assurance engagement

Criteria

Standard used to measure subject matter

Relevance

Completeness

Reliability

Neutrality

Understandability

Characteristics of suitable criteria

Established criteria

Criteria embodied by law or regulations

Specifically developed criteria

Specifically designed for the purpose

Professional skepticism

Practitioner must have a questioning mind

Evidence

Information obtained by the practitioner

Sufficiency

Measure of quantity of evidence

Appropriateness

Measure of the quality of evidence, relevance and reliability