Assurance Engagement Overview

The process of providing independent assurance on the reliability of information or the effectiveness of processes.

A professional service that provides an independent opinion on the fairness of financial statements.

A professional service that provides independent assurance on the effectiveness of internal controls.

A professional service that provides independent assurance on the reliability of non-financial information.

A professional service that provides independent assurance on the design and effectiveness of a system of internal controls.

An independent assurance engagement where the practitioner expresses a conclusion on a subject matter, based on sufficient appropriate evidence, using a suitable framework.

A professional service that provides independent assurance on the presentation of a financial instrument based on the reporting framework.

A professional service that provides independent assurance on the environmental performance of a company.

An engagement where a practitioner provides assurance to intended users about the reliability of a subject matter measured against specific criteria.

The person or group responsible for preparing and presenting the subject matter of an assurance engagement.

The individual or group who will rely on the assurance provided by the practitioner.

The data, systems, processes, or behaviors being evaluated in an assurance engagement.

The standards, guidelines, or frameworks used to measure the subject matter in an assurance engagement.

Financial statements, business projections, or other relevant information.

Internal controls, computer systems, or other operational processes.

Social responsibility, environmental impact, or corporate governance practices.

Assurance services are provided by a qualified professional to provide confidence in the subject matter. These services are not required by law.

An assurance service involves three parties: the practitioner performing the engagement, the responsible party preparing the subject matter, and the intended user of the assurance service.

The subject matter in an assurance service is the specific item or information being reviewed. It can be anything from financial statements to environmental reports.

Relevant criteria are the standards or benchmarks against which the subject matter is assessed in an assurance service. These criteria ensure consistency and comparability.

Evidence is gathered by the practitioner in an assurance service to support their conclusions. This evidence can include financial records, interviews, and observations.

This is the process of a practitioner providing assurance to intended users about the reliability of a subject matter measured against specific criteria.

A practitioner's objective is to provide assurance to intended users on the subject matter of an engagement.

The person or group responsible for preparing and presenting the subject matter of an assurance engagement.

The individual or group who will rely on the assurance provided by the practitioner.

The data, systems, processes, or behaviors being evaluated in an assurance engagement.

The standards, guidelines, or frameworks used to measure the subject matter in an assurance engagement.

The auditor must consider the factors such as ethical qualification, sufficient resources, and client permission to contact previous auditors before accepting an engagement.

The auditor must communicate the terms of the engagement in writing, including details of the engagement, the auditor's responsibilities, and the intended users.

A formal document outlining the scope of work to be performed by an assurance firm, including the responsibilities of the auditor and the client.

Issues related to the acceptance of new audit clients, including the assessment of client integrity, financial stability, and the suitability of the engagement.

Information gathered about a potential client, including their financial history, reputation, and any known legal or regulatory issues.

A series of procedures undertaken by assurance firms to evaluate the suitability of potential clients and engagements.

Information about a company, including its financial statements, business operations, and management.

Legal requirements aimed at preventing money laundering, including client identification and transaction monitoring.

The objectives and scope of the assurance engagement, including the specific procedures to be performed by the auditor.

The process of offering quotes and services to potential clients, often in competition with other firms.

New auditors need to be properly appointed and ensure that their engagement is legal and ethically sound.

This involves checking if there are any independent or ethical issues that could compromise the audit, such as conflicts of interest.

Before accepting an engagement, auditors should confirm if they have the necessary time, staff, and technical expertise.

It's important to obtain references from previous clients to understand the potential client's reputation and management.

Communicate with the existing auditors to gather information about the client's financial situation and any potential reasons for the audit change.

Auditors must evaluate the integrity of the company's management, especially if a few individuals have significant control.

The auditors must be professionally qualified to conduct the audit and avoid potential conflicts of interest.