Chapter 1 - Chapter 1 Auditing and Assurance Services...

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Unformatted text preview: Chapter 1 Auditing and Assurance Services "If you want to be successful, it's just this simple: Know what you're doing. Love what you're doing. And believe in what you're doing." -- Will Rogers Chapter 1 Objectives 1. Define information risk and explain how auditing and assurance services play a role in reducing this business risk. 2. Define and contrast auditing , attestation , and assurance services . 3. Describe and define the management assertions embodied in financial statements, and explain why auditors use them as a focal point of the audit. 4. Explain some characteristics of professional skepticism. 5. Describe the organization of public accounting firms and identify the various services they offer. 6. Describe the audits and auditors in governmental, internal, and operational auditing. 7. List and explain the requirements for becoming a certified information professional. 1-2 User Demand for Reliable Information Todays information More complex Demanded by remote users Demanded in a more timely manner Has far reaching consequences Information risk the risk (probability) that the information (mainly financial) disseminated by a company will be materially false or misleading. users demand an independent third party assessment of the information 1-3 Exhibit 1.2 Overview of Financial Statement Auditing 1-4 Definition of Auditing Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users. Financial Statements (including footnotes) GAAP Auditor's Report/ Other Reports Persons who rely on the financial reports Creditors Investors Source: American Accounting Association Committee on Basic Auditing Concepts. 1973. A Statement of Basic Auditing Concepts , American Accounting Association (Sarasota, FL). 1-5 The Relationships Among Auditing, Attestation, and Assurance Engagements Assurance Services Any Information Attestation Services Primarily Financial Information Auditing Financial Statements 1-6 Assurance Services Assurance services are independent professional services that improve the quality of information, or its context, for decision makers....
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Chapter 1 - Chapter 1 Auditing and Assurance Services...

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