1. Compare and contrast assurance and non-assurance services offered by CPAs.

Professional Accountants in Public Practice offers wide range of services. Two types of
services that are most sought from such professionals are the assurance services and non-
assurance services.

The basic difference between non-assurance service and assurance service is that the
latter is covered by the Philippine Framework on Assurance Engagements while the former is
not. Also, assurance service, as a type of independent professional service typically provided by
certified accountants or CPAs intends to increase the degree of confidence of the intended users
and management towards the outcome of an evaluation or measurement of the subject matter
which corresponds with the criteria of the financial reporting standards. Meanwhile, a non-
assurance service is a type of service which doesn't impact on the degree of confidence in the
reliability of the financial statements. Where in the assurance service, the professional accountant
expresses conclusion on the subject matter out from the evaluation and assessments of evidence
collected to provide a level of assurance, non-assurance service doesn’t render such conclusion
nor expresses any assurance. Although there is no level of assurance obtained from non-
assurance services, intended users can still benefit from the factual findings provided by CPAs.

While both contain differences, they also have similarities in terms of the need to gather
sufficient and appropriate evidence, render information to intended users, and provide a report.

2. Discuss each element of assurance engagements.

An assurance engagement must possess five elements. This includes three party
relationship, appropriate subject matter, suitable criteria, sufficient appropriate evidence, and an
assurance report.

In assurance engagements, there must be three party relationship that consists of a

practitioner, responsible party, and the intended user. The practitioner is the professional who
gives assurance to the intended users through evaluating and assessing the collected evidences to
render an opinion or conclusion about a subject matter prepared by the responsible party. The
subject matter in assurance engagements can have numerous forms like financial performance or
conditions which subject matter information or outcome is the recognition, measurement,
presentation, and disclosure denoted in the financial statements. It is important that the subject
matter be recognizable and equipped for constant evaluation to accumulate adequate proof in
support of an assurance made. This subject matter is then subjected to evaluation and measures
against a suitable criterion. A suitable criterion is relevant, complete, reliable, neutral, and
understandable to permit the intended users to comprehend how the subject matter has been
assessed or measured. Practitioners should likewise guarantee that they have collected sufficient
appropriate proofs or evidences so as to provide the necessary level of assurance engagement. In
order to ensure that the evidences are sufficient and appropriate, practitioners must consider
professional skepticism, materiality, and any assurance engagement risk. Lastly, a report of
conclusion that indicates the level of assurance must be given by the practitioner for the benefit
of the intended users.

3. Elucidate materiality, professional skepticism, and risk in the conduct of services offered
by CPAs.

1. Discuss the difference in the various areas of accountancy practice.

The accountancy profession involves a wide scope of practice. A professional accountant

may belong in any of the four areas of accountancy practice. As stated in The Philippine
Accountancy Act of 2004 (R.A. 9298) Article I, section 4, these areas involve public practice,
commerce and industry, education/academe, and the government.

Professional Accountants in public practice offer or render fee-paying services such as

audit and verification of financial transactions, tax planning and preparation, and advisory
services to their clients. Accountants in public practice deal with the financial and accounting
needs of clients while remain independent from their clients. On the other hand, practice in
commerce and industry serves only one company. Accountants in private accounting offer a staff
role which bolsters the company by carrying out accounting-related jobs. Positions in industry
incorporate passage level employments, for example, bookkeeper, accounting clerk, financial
analyst, internal auditor, and others. In academe, professional accountants pursue careers as
instructors, researchers, reviewers and authors. While in government practice, professional
accountants help in planning, budgeting, forecasting and allocating government funds.

2. Assuming that you passed the recently conducted CPA Licensure Examination, which
area of accountancy practice will you engage? Why?

If I am to choose an area of accountancy practice to engage in, I want to be an accountant

in public practice. I believe that in this field, I would be able to encounter varied types of work
and professionals that could help me develop and hone the knowledge I have in relation to
accounting. Also, I want to take the chance to propel my profession rapidly because there is so
much more I want to discover and learn, and I think public accountants are able to obtain
proficiency in all facets of accounting and attain more experience quicker by working with
diverse clients. Moreover, accountants in public practice are provided with a greater range of
work in contrast with working in industry which would in turn result to a more challenging and
flexible work environment.