PHILIPPINE FRAMEWORK FOR

ASSURANCE ENGAGEMENTS
Framework for Assurance Engagements
• This Framework defines and describes the elements and objectives of
an assurance engagement, and identifies engagements to which
Philippine Standards on Auditing (PSAs), Philippine Standards on
Review Engagements (PSREs) and Philippine Standards on Assurance
Engagements (PSAEs) apply.
Framework for Assurance Engagements
Practitioners who perform assurance engagements are governed The
Code of Ethics for Professional Accountants in the Philippines, which is
adopted from the IFAC Code of Ethics for Professional Accountants.
What are the fundamental ethical principles that all professional
accountants are required to observe
Framework for Assurance Engagements
What is an assurance engagement?
Framework for Assurance Engagements
“Assurance engagement” means an engagement in which a practitioner
expresses a conclusion designed to enhance the degree of confidence
of the intended users other than the responsible party about the
outcome of the evaluation or measurement of a subject matter against
criteria.
Framework for Assurance Engagements
What is the difference between “assertion-based engagements” and
direct reporting engagements?
Framework for Assurance Engagements
If the measurement of subject matter is given by the responsible party,
it takes the form of assertions if it is disclosed to the intended
users and then practitioner is asked to affirm such assertions of the
responsible party. Such assurance engagement is attestation
engagement. Another name for attestation engagement is assertion-
based engagement as practitioner express his opinion about assertions
fairness.
Framework for Assurance Engagements
Under the Framework, there are two types of assurance engagement a
practitioner is permitted to perform: a reasonable assurance
engagement and a limited assurance engagement.
Framework for Assurance Engagements
The Framework does not cover the following engagements:
1. Engagements covered by Philippine Standards for Related Services,
such as agreed-upon procedures engagements and compilations of
financial or other information.
2. The preparation of tax returns where no conclusion conveying
assurance is expressed.
3. Consulting (or advisory) engagements,7 such as management and
tax consulting.
Framework for Assurance Engagements
As much as possible, a report that is not an assurance report should
avoid the use of the following :
1. Implying compliance with this Framework, PSAs, PSREs or PSAEs.
2. Inappropriately using the words “assurance,” “audit” or “review.”
3. Including a statement that could reasonably be mistaken for a
conclusion
Framework for Assurance Engagements
As much as possible, a report that is not an assurance report should
avoid the use of the following :
1. Implying compliance with this Framework, PSAs, PSREs or PSAEs.
2. Inappropriately using the words “assurance,” “audit” or “review.”
3. Including a statement that could reasonably be mistaken for a
conclusion
Engagement Acceptance
When can a practitioner accept an assurance engagement
Engagement Acceptance
Having accepted an assurance engagement, a practitioner may not
change that engagement to a non-assurance engagement, or from a
reasonable assurance engagement to a limited assurance engagement
Elements of an Assurance Engagements
The following elements of an assurance engagement are discussed in
the Framework:
1. A three party relationship
2. An appropriate subject matter
3. Suitable criteria
4. Sufficient appropriate evidence
5. A written assurance report
Can the responsible party and the intended users be from different the
same entity?