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Unformatted text preview: CHAPTER 21 ATTESTATION ENGAGEMENTS AND OTHER ACCOUNTING SERVICES Answers to Review Questions 21.1 Assurance services are independent professional services that improve the quality of information, or its context, for decision makers. The definition focuses on decision-making because good decision-making requires quality information that can be financial or nonfinancial. An assurance service engagement can aid the decision maker in searching through the available information in order to identify which pieces of information are relevant for the required decision and in improving the quality of the information or its context. An assurance service engagement can also improve quality through increasing confidence in the informations reliability and relevance. 21-2 The Special Committee on Assurance Services has developed the following six assurance services: Risk assessment- assurance that the entitys profile of business risks is comprehensive and evaluates whether the entity has appropriate systems in place to effectively manage those risks. Business performance measurement- assurance that an entitys performance measurement system contains relevant and reliable measures for assessing the degree to which the entitys goals and objectives are achieved or how its performance compares to competitors. Information system reliability- assurance that an entitys internal information systems provide reliable information for operating and financial decisions. Electronic commerce- assurance that systems and tools used in electronic commerce provide appropriate data integrity, security, privacy, and reliability. Health care performance measurement- assurance about the effectiveness of health care services provided by HMOs, hospitals, doctors, and other providers. ElderCare- assurance that specified goals regarding the elderly are being met by various care givers. 21-3 There are three broad risks associated with electronic commerce: business practices, transaction integrity, and information protection. The WebTrust Principles are: Business Practices Disclosure- The entity discloses its business practices for electronic commerce transactions and executes transactions in accordance with its disclosed...
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This note was uploaded on 11/13/2011 for the course ACCT 470 taught by Professor Fdsafd during the Summer '09 term at Franklin.
- Summer '09