Is one where a professional accountant evaluates or measures a subject matter that is the responsibility of another party against suitable criteria, and expresses an opinion which provides the intended user with a level of assurance about the subject matter.
An assurance engagement means an engagement in which the practitioner expresses a conclusion designed to enhance the degree of confidence of the intended user other than the responsible party about the outcome of the evaluation or measurement of a subject matter against criteria.
Types of assurance engagements:
1.engagements intended to provide high or moderate levels of assurance
2.engagements to report internally and externally
3.engagements in the private or public sector
The objective of an audit of F/S is to enable the auditor to express an opinion whether the F/S are prepared, in all material respects, in accordance with an identified financial reporting framework.
The review engagement enables an auditor to state whether, on the basis of procedures which do not provide all the evidence that would be required in an audit, anything that has come to the auditor\u2019s attention that causes the auditor to believe that the financial statements are not prepared, in all
The auditor simply provides a report of the actual findings, so no assurance expressed. Users of the report must instead judge for themselves the auditor\u2019s procedures and findings, and draw their own conclusions from the auditor\u2019s work.
Users of the compiled information gain some benefit from the accountant\u2019s (as opposed to auditor\u2019s) involvement, but no assurance is expressed on report.
The need for an external audit arises primarily when the ownership and management of an enterprise are separated. There are however, certain inherent advantages in having financial statements audited even when no statutory requirement exists for such an audit.
providing information to the auditor. A professional auditor should therefore plan his audit carefully to minimize disruption which his work will cause.
Means of advising the organization, as to whether its systems are running soundly.
financial statements provide a true and fair view of the org.
No legal basis, although it is advised that company should have regular internal audits.
Usually a requirement imposed by statute. For larger ltd and public comp.
Evaluate internal control
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