summary.docx - Question 1 Auditing Assurance A review engagement is a professional engagement in which the auditor performs procedures designed to

summary.docx - Question 1 Auditing Assurance A review...

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Question 1 Auditing, AssuranceA review engagementis a professional engagement in which the auditor performsprocedures designed to enable the auditor to obtain the moderate level of assurancerequired to provide a negative assurance report.Define an assurance engagementAn assurance engagement involves an assurance provider arriving at an opinionabout some information being provided by their client to a third party. A financialreport audit is one type of assurance engagement. This engagement involves andauditor arriving at an opinion about the truth and fairness of the financial report. Theiraudit report is addressed to the shareholders of the company being audited, but otherusers may read the financial report.Audit v Review EngagementAudits is standards refer to reasonable assurance engagement, it provides a positiveoption on the subject matter and also can be a range of statements not just financialstatements, e.g. the subject matter complies with criteria. Review engagements isstandards refer to limited assurance engagements, it provides a negative opinion onthe subject matter, means nothing has come to attention that causes user to believethe subject matter does not comply with criteria.Assurance serviceis an independent professional service, typically provided byCertified Public Accountants, with the goal of improving the information or the contextof the information so that decision makers can make more informed, and presumablybetter, decisions. Assurance services provide independent and professional opinionsthat reduce the information risk. Assurance services include financial report audits,compliance audits, performance audits, comprehensive audits, internal audits, andassurance on corporate social responsibility disclosures.1)Financial Report Audits provides reasonable assurance about whether thefinancial report is prepared in all material respects in accordance with a financialreporting framework, and give a true and fair view. 2)Compliance Auditsan audit to determine whether the entity has conformed withregulations, rules or processes.3)Performance auditan assessment of the economy, efficiency and effectivenessof an organization’s operations.4)Comprehensive auditan audit that encompasses a range of audit and audit-related activities, such as a financial report audit, performance audit andcompliance audit.5)Internal auditan independent service within an entity which generally evaluatesand improves risk management, internal control procedures and elements of thegovernance processDifferentiate between the different role of the preparer and the auditorIt is the responsibility of a company’s governing body to ensure that their financialreport is relevant, reliable, comparable, understandable, and true and fair. It is theresponsibility of the auditor to form an opinion on the truth and fairness or fairpresentation of the financial report. In doing so the auditor must maintain their
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