Professional Documents
Culture Documents
تدقيق
تدقيق
Introduction .............................................................................................................2
Assurance service ......................................................................................................3
types provide services CPAs..........................................................................................4
A audit .....................................................................................................................4
A review ...................................................................................................................5
A compilation ...........................................................................................................7
non-auditing services ....................................................................................................8
nine audit services ........................................................................................................9
bookkeeping or other services relating to the accounting records ...................................9
Financial Information System Design and Implementation ....................................... 10
provided to audit clients. ...................................................................................... 10
Appraisal or Valuation Services, Fairness Opinions or............................................... 10
Contribution-In-Kind Reports provided to audit clients............................................. 10
Actuarial Services provided to audit clients ............................................................. 11
Internal Audit Services provided to audit clients. ..................................................... 11
Management Functions provided to audit clients. ................................................... 12
Human Resources services provided to audit clients. .................................................. 12
Broker Dealer Services provided to audit clients ......................................................... 13
Legal Services provided to audit clients. ..................................................................... 13
Post employment benefits Plan and administration .............................................. 14
Tax Services provided to audit clients..................................................................... 14
Other Services provided to audit clients. ................................................................ 15
References ................................................................................................................. 16
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Introduction
The word, audit, has been derived from the Latin word Audire meaning to hear. Auditing is
a formal examination of accounting books, documents and vouchers of a business concern in
order to verify the profit and loss and the financial position of a business. Its a systematic
check or assessment of financial records of a business, department or organization to
establish accuracy or efficiency or effectiveness.
The need of audit arises due to the fact that a business enterprise needs to ensure the
correctness of all accounts pertaining to the business. It is also important to ascertain
whether or not, the financial statements, profit and loss account and balance sheet have
been prepared in a way as to show the summary of the flow of transactions for the whole
period and the true picture and position of a business enterprise. Besides, in order to ensure
the accuracy or the efficiency of the records, detection and prevention of errors is vitally
important. Hence, audit, under its main objectives and subsidiary objectives fulfills the
purpose.
Audit is an effective tool for a Business Management, as internal audit is conducted in order
to ensure the policies are being followed. It enables to make valuable suggestions for
improvement and to formulate future policies of a business. Audit also helps management
to review the policies from time to time.
Since audit involves a detailed verification of accounting records, it helps greatly to discover
errors or frauds while it promotes a moral check on the employees through which their
efficiency may also be determined. To its more positive form, audit can motivate the
employee to maintain the efficiency leading to increase their performance level. Aside from
these, it is with the help of audit that misappropriation of goods and manipulation of records
may be identified.
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Assurance service
Assurance service is: an independent professional service, typically
provided by Chartered or Certified Public Accountants or Chartered
Certified Accountant, with the goal of improving information or the
context of information so that decision makers can make more
informed, and presumably better, decisions. Assurance services provide
independent and professional opinions that reduce information risk (risk
from incorrect information)
They differ from many services historically provided by CPAs in that they
represent an expansion of the information and forms of reports
provided. Indeed, they represent an evolution in the nature of services
provided by CPAs, as CPAs have begun to provide services not just on
accounting information but on many other types of information that
people need in order to make decisions.
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types provide services CPAs
A audit
An audit is the highest level of financial statement service a CPA can provide. The purpose of
having an audit is to provide financial statement users with an opinion by the auditoron
whether the financial statements are prepared in accordance with the proper financial
reporting framework. An audit enhances the degree of confidence that intended users, such
as lenders or investors, can place in the financial statements.
The auditor obtains reasonable assurance about whether the financial statements as a
whole are free from material misstatement, and whether the misstatements are from error
or fraud.
To obtain reasonable assurance, items are observed, tested, confirmed, compared or traced
based on the auditors judgment of their materiality and risk. After gathering appropriate
evidence through this process, the auditor issues an opinion about whether the financial
statements are free from material misstatement.
As an additional benefit, the auditor may become aware of some deficiencies in internal
control or weaknesses in the organizations systems and offer suggestions for improvement.
Some of the more important auditing procedures include:
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Observing the physical inventory count
Ideally, auditors will provide an unqualified, or clean, opinion on the companys financial
statements. An unqualified opinion will contain language such as the financial statements
present fairly in all material respects and in conformity with accounting principles
generally accepted (GAAP) in the United States.
A qualified opinion due to a scope limitation alerts the reader that, except for the matter to
which the qualification relates, the financial statements present fairly, in all material
respects, the companys financial position. If the scope limitation is severe enough, the
auditors may disclaim an opinion on the overall financial statements.
When an auditor issues a qualified opinion, the auditor believes the financial statements are
fairly stated in all material respects except for a material departure from GAAP. But the
auditor has concluded not to express an adverse opinion.
However, if the auditor concludes that the departures from GAAP are so significant that the
financial statements as a whole are not fairly stated, an adverse opinion must be issued. An
adverse opinion will include language describing what the auditor believes is materially
misstated in the financial statements, and the effects of the misstatements. If the effects are
not reasonably determinable, the auditors will state that.
A review
A review engagement is conducted to provide limited assurance that there are no material
modifications that should be made to the financial statements for them to be in conformity
with the financial reporting framework.
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A review differs significantly from an audit. Review engagements provide less assurance to
the reader of the financial statements because the CPA does not perform many audit
procedures. The broad review procedures required to be performed by the CPA are:
Written representations from management regarding the accuracy of all information given
to the CPA
Knowledge of fraud
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2. Plausible relationships of recorded amounts
Based on the inquiries and analytical procedures, the CPA is able to express only limited
assurance that there are no material modifications that should be made to the financial
statements for them to be in conformity with the applicable financial reporting framework.
Because a review engagement is substantially less intensive in scope than an audit, the CPA
cannot express an opinion on the fairness of the financial statements taken as a whole.
A compilation
While independence is required at the other levels of service, the CPA does not have to be
independent of your organization to perform a compilation. The report must state that the
accountant is not independent.
Further options lie within the compilation level of service. The compilation report may be a
full disclosure report with complete footnote explanations of certain amounts and policies
contained in the financial statements. Or, these otherwise required disclosures may be
omitted. Omission of this information is not permissible under the other levels of service.
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It is important to find the proper balance between the cost of the CPAs services and the
level of assurance the users of the financial statements require.
non-auditing services
Non-audit services may be any services other than audit provided by an auditor to an audit
client. Public accounting firms expanded the scope of their services to include corporate and
individual tax planning, internal audit outsourcing and consulting related to mergers and
acquisitions, information system (Salehi, 2009 s more economic for auditors to provide other
additional services to their clients, since the auditor already has a good knowledge of their
clients business (Islam et al., 2005a).
November 2002- -Prior to the adoption of the Sarbanes-Oxley Act ("SOA"), there was some
confusion over what types of non-auditing services the outside accountant could perform
for a public corporation. In fact, some of the major accounting firms sold their consulting
units in recent years in order to avoid any possible conflicts of interest
legal requirements to report on matters such as share issues for non-cash consideration,
expenditure for grant application purposes, etc
2. Services that it is most efficient for the auditors to provide because of their existing
knowledge of the business, or because the information required is a by-product of
the audit process. These include:
services such as those listed in category (1) above that the auditors are not required by law
to undertake, but where the information largely derives from the audited financial records
tax compliance, where much of the information derives from the audited financial records
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.3 Services that could be provided by a number of firms. In this case, the fact that the firm is
the auditor is incidental and it would generally only be chosen because, for example, it had
won a tender process. Examples of such services include:
Bookkeeping and other services related to the audit clients accounting records
Financial information systems design and implementation
Valuation services and fairness opinions
Actuarial services
Internal audit services
Management functions
Human resource planning
Broker-dealer services
As Legal services
or consolidated entity.
company.
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Financial Information System Design and Implementation
following
C) Any of the following valuation services that may be provided to audit clients:
v. Debt.
entities.
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viii. Financial investments.
x. Derivatives.
benefit liabilities.
v. Prospective information .
liabilities.
claims.
ix. Superannuation/pension.
i. Forecasting cash-flow
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B) Providing assistance in implementation of internal controls.
C) Setting the scope, risk and frequency of the internal audit work.
Audit Committee.
G) Is the auditor staff providing the internal audit service permitted to assist in the Financial
Statement audit
H) Audit firm staff secondments to the internal audit division of the audit client
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F) Draft employment contracts.
D) Contract support
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I) Negotiate contract terms for the audit client
A) Can the auditor act in a fiduciary duty capacity on the audit client's employment benefit
plan? ('theplan.)'
C) Can the auditor make disbursements and calculate on behalf of the plan?
or subsidiaries.
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G) Prepare the calculation of the tax effect accounting balances.
H)Prepare the income tax calculation for tax compliance and then use this
you permit or prohibit that has not appeared elsewhere in this survey.
A) Share-registry services
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References
1. Survey On The Regulation Of Non-Audit Services Provided By Auditors To
Audited Companies MARCH 2007 OICU IOSCO
2. Salehi, M. and M. Moradi, 2010. Iranian angle to non-audit services: Some
empirical evidence. Managing Global Transitions
3. Islam, A., W. Karim, M. Khaled and T. van Zijil, 2005. Non-audit services and
auditor independence: An analysis using the informativeness of earnings.
4. https://en.wikipedia.org
5. http://accounting.smartpros.com/x35824.xml
6. https://www.linkedin.com/in/fareedsiddiqui1
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An-Najah National University
Faculty of Graduate Studies
Master in Accounting
Search for other services provided by the
CPAs
Under the kind supervision:
Dr: Muiz Abu Alia
Prepared By: Assi out
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