Podcast
Questions and Answers
What is the primary goal of non-assurance services?
What is the primary goal of non-assurance services?
What distinguishes attestation services from other assurance services?
What distinguishes attestation services from other assurance services?
Which of the following is an example of assurance services?
Which of the following is an example of assurance services?
In the context of audits, what is the role of evidence?
In the context of audits, what is the role of evidence?
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Which type of service is categorized as a non-assurance service?
Which type of service is categorized as a non-assurance service?
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Which statement is true regarding auditors and assurance services?
Which statement is true regarding auditors and assurance services?
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What is a key characteristic of non-assurance services?
What is a key characteristic of non-assurance services?
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Which of the following best describes a necessary audit?
Which of the following best describes a necessary audit?
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What is the primary objective of assurance services provided by auditors?
What is the primary objective of assurance services provided by auditors?
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Which of the following is NOT an example of attestation services?
Which of the following is NOT an example of attestation services?
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What distinguishes an audit from a review of financial statements?
What distinguishes an audit from a review of financial statements?
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What is a requirement of public companies under the Sarbanes-Oxley Act regarding internal controls?
What is a requirement of public companies under the Sarbanes-Oxley Act regarding internal controls?
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Which service provides assurance regarding a company's compliance with financial provisions of a loan?
Which service provides assurance regarding a company's compliance with financial provisions of a loan?
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What type of report must auditors issue in attestation services?
What type of report must auditors issue in attestation services?
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Which of the following best describes Sys Trust services?
Which of the following best describes Sys Trust services?
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What is a common obligation for public companies regarding interim financial statements?
What is a common obligation for public companies regarding interim financial statements?
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Study Notes
Assurance Services
- Assurance services improve information quality for decision-makers.
- They can be performed by CPAs (audits or reviews) or other professionals (attestation services in IT).
Attestation
- A type of assurance service where a CPA firm reports on a third party's assertion.
- CPAs must always issue a written opinion and report in a formal standardized format.
Examples of Attestation Services
- Audit of historical financial statements: Examines financial statements for fairness of presentation. This service requires a higher level of assurance and a positive opinion, leading to higher fees.
- Review of historical financial statements: Provides limited assurance (negative opinion). Fees are lower due to a lower assurance level and less effort.
- Audit of internal control over financial reporting: Required for public companies per the Sarbanes-Oxley Act (SOX).
- Attestation services on information technology: Examples include WebTrust (evaluates website integrity) and SysTrust (evaluates system reliability).
- Other attestation services: Forecasted financial statement attestations for loans, attestations on company compliance with loan agreements, attestations on corporate governance compliance, and attestations on GHG compliance.
Other Assurance Services
- Enhance information quality without requiring a written report, often using a certificate.
Examples of Other Assurance Services
- ISO Certifications: Certify companies' compliance with ISO 9000 quality control standards.
Non-Assurance Services
- Generate recommendations for decision-making without issuing written reports.
Examples of Non-Assurance Services
- Accounting and bookkeeping services
- Tax services
- Management consulting services
Types of Audits
- Audits verify assertions and compare them to specified criteria.
- Auditors gather evidence to reach an objective opinion supported by evidence.
- Audits can be conducted on quantifiable information (financial statements) and subjective information (system effectiveness).
External Auditing
- External auditing is an attestation service and therefore an assurance service.
- All attestation is assurance, but not all assurance is attestation.
- External auditors regularly perform audits on various types: Quality audits, External audits, Operational audits.
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Description
This quiz covers the fundamentals of assurance services, focusing on how they enhance information quality for decision-makers. It will also delve into attestation services performed by CPAs, including audits and reviews of financial statements, as well as compliance with regulations like the Sarbanes-Oxley Act.
