Introduction

1. This Philippine Standard on Assurance Engagements has three purposes:

(a) to describe the objectives and elements of assurance engagements intended to provide either a
high or moderate level of assurance (paragraphs 4-30);

(b) to establish standards for and provide guidance to professional accountants in public practice
for the performance of engagements intended to provide a high level of assurance (paragraphs 31-74);
and

(c) to act as a framework for the development by the ASPC of specific standards for particular types
of assurance engagements.

2. When a professional accountant is engaged to perform an assurance engagement for which

specific standards exist, those standards apply: if no specific standards exist for an assurance
engagement, this document applies. Where a professional accountant in public practice performs an
engagement intended to provide a high level of assurance for which no specific standards exist, the
standards and principles set out in paragraphs 31-74 are to be followed.

3. This Standard does not supersede the existing Philippine Standards on Auditing (PSAs). For
example, it does not apply to an audit or review of financial statements.

OBJECTIVE AND ELEMENTS OF AN ASSURANCE ENGAGEMENT

Objective of an Assurance Engagement

4. The objective of an assurance engagement is for a professional accountant to evaluate or

measure a subject matter that is the responsibility of another party against identified suitable criteria,
and to express a conclusion that provides the intended user with a level of assurance about that subject
matter. Assurance engagements performed by professional accountants are intended to enhance the
credibility of information about a subject matter by evaluating whether the subject matter conforms in
all material respects with suitable criteria, thereby improving the likelihood that the information will
meet the needs of an intended user. In this regard, the level of assurance provided by the professional
accountant’s conclusion conveys the degree of confidence that the intended user may place in the
credibility of the subject matter.

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5. There is a broad range of assurance engagements, which includes any combination of the
following.

• engagements to report on a broad range of subject matters covering financial and non-financial
information.

• engagements intended to provide high or moderate levels of assurance.

• attest and direct reporting engagements.

• engagements to report internally and externally.

• engagements in the private and public sector.

6. Not all engagements performed by professional accountants are assurance

engagements. This does not mean that professional accountants do not undertake such engagements,
only that these engagements are not covered by this Standard. Other engagements frequently
performed by professional accountants that are not assurance engagements include the following.

• Agreed-upon procedures.

• Compilation of financial or other information.

• Preparation of tax returns where no conclusion is expressed, and tax consulting.

• Management consulting.

• Other advisory services.

7. An agreed-upon procedures engagement, in which the party engaging the professional

accountant or the intended user determines the procedures to be performed and the professional
accountant provides a report of factual findings as a result of undertaking those procedures, is not an
assurance engagement. While the intended user of the report may derive some assurance from the
report of factual findings, the engagement is not intended to provide, nor does the professional
accountant express, a conclusion that provides a level of assurance. Rather, the intended user assesses
the procedures and findings and draws his or

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her own conclusions. However, a professional accountant may undertake an engagement that
is similar to an agreed-upon procedures engagement but which does result in the expression of a
conclusion that provides a level of assurance. Where, in the judgment of the professional accountant,
the procedures agreed to be performed are appropriate to support the expression of a conclusion that
provides a level of assurance on the subject matter, and the professional accountant intends to do so,
then such an engagement becomes an assurance engagement governed by this Standard.