Distinguish Between

Auditing and Accounting

Accounting is the recording, classifying,
and summarizing of economic events
for the purpose of providing financial
information used in decision making.

Auditing is determining whether

recorded information properly
reflects the economic events that
occurred during the accounting period.
 Additional reading (Textbook 1)

v Flowchart of overall auditing and assurance framework (page 5)

v LO 1.1: The framework for assurance engagements and the types

of assurance engagements (page 6)

v Types of assurance engagements

v Why there is value in the assurance service

v Fundamental principles of professional ethics

v Fundamental auditing principles

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 Figure 1.1 Flowchart of
overall auditing
and assurance framework

3
LO 1.1: The framework for assurance engagements
and the types of assurance engagements (page 6)

v Many parties provide reports to users as an aid to making

decisions.
v Reports are potentially biased due to the vested interests of
the report providers.
v Users may demand that the credibility of the report be
enhanced by having an independent expert examine it.
v Financial reports are just one type of report that can be
assured.

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 Types of assurance engagements
(Các loại hình hợp đồng kiểm toán-page 9)

• Reasonable assurance engagements are commonly called

'audit engagements'.
• Limited assurance engagements are commonly called 'review
engagements'.
• There are also engagements that provide no assurance:
• agreed-upon procedures engagements where the auditor reports their
findings and doesn’t provide assurance.

5
 Figure 1.3
Reasonable
assurance
(p.10)

6
 Assurance, Attestation, and Non-assurance Services

Relationships Among Assurance Services, Attestation, and Non-assurance Services

7
 Why there is value in the assurance
service

v Independence
• Users derive value from the knowledge that the assurance
provider has no interest in the information other than for its
usefulness.

v Expertise
• Assurers must have the competence to obtain sufficient
relevant information to provide a reasonable basis for their
conclusions.
• Requires professional judgment and professional scepticism.

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 Expertise: Professional judgment
and professional scepticism

• Professional judgment (xét đoán nghề nghiệp)

• involves the application of relevant training, knowledge
and experience in making informed decisions about
appropriate courses of action.

• Professional scepticism (hoài nghi nghề nghiệp)

• An attitude that includes a questioning mind, being alert to
conditions indicating possible misstatement and critically
assessing audit evidence.

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 Fundamental principles of professional ethics
(Page 15)

v Contained in national and international codes of ethics:

• integrity
• objectivity
• professional competence and due care
• confidentiality
• professional behaviour

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Fundamental auditing principles (Page 15)

• Knowledge • Professional
• Responsibility judgment
• Quality control • Documentation
• Rigour and • Communication
scepticism • Association
• Evidence • Reporting

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