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Unformatted text preview: Chapter 20 - Additional Assurance Services: Other Information CHAPTER 20 Additional Assurance Services: Other Information Review Questions 20-1 Assurance services are independent professional services that improve the quality of information, or its context for decision makers; attestation services are those assurance services that involve issuing an examination, review or agreed-upon procedures report on subject matter (or an assertion about the subject matter) that is the responsibility of another party. Assurance services may go beyond attestation services in that they may involve analyzing data or placing it in a form to facilitate decision making. 20-2 In performing decision context enhancement services, CPAs may collect information that is generally considered relevant to a particular decision and synthesize it for the users. In such engagements, a report may or may not be issued and, if one is issued, it could be oral, symbolic, or in any other appropriate form. 20-3 Assurance services developed as a natural extension of the audit function. Management has recognized that contracting costs may be reduced in many situations by providing users access to information that is certified as to its reliability. Developments in information technology also have fueled the demand for assurance services as users can now have instantaneous access to a broad range of "on-line" information that may be customized to their needs. 20-4 Continuous auditing may be of more value than periodic auditing because the assurance is provided simultaneously or shortly after the related information is released. Continuous auditing is particularly valuable for information that is released on a company's Website on a continuous basis (e.g., changes in backlog, or sales by day). 20-1 Chapter 20 - Additional Assurance Services: Other Information 20-5 The three types of attestation engagements outlined in the attestation standards are: (1) Examination An examination is designed to provide the highest level of assurance that CPAs providethe same level as an audit of financial statements. When performing an examination, CPAs select procedures to gather sufficient evidence to allow the issuance of a report with a positive opinion on whether the subject matter being examined are presented in accordance with the selected criteria. Sufficient evidence has been obtained when attestation risk is driven to a low level. (2) Review A review involves performing limited procedures, such as inquiries and analytical procedures. In performing a review, the CPAs gather sufficient evidence to drive attestation risk to a moderate level. (3) Agreed-upon procedures An agreed-upon procedures engagement involves performing procedures that were agreed-upon with specified users of the report. Reports on agreed-upon procedures are restricted use reports in that they are intended only for those specified users....
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- Fall '09