Professional Review and

Training Center (PRTC)

The Practitioner’s
Engagements
(AT.2501)

Leomar R. Cabarles
Responsible Subject Intended
Party Matter Users

?
Criteria
 Demand for Assurance Engagements

• Bias of responsible party

• Remoteness of users

• Subject matter complexity

• Risk management—reduce
information risk Enhanced
QUALITY of
• Reduce cost of capital
subject matter
Responsible Subject Intended
Party Matter Users

Evaluation or
? Conclusion that
enhances
measurement confidence
Criteria

Practitioner
 Types of Assurance Engagements

1 Level of assurance

2 Structure
Level of Assurance Engagements
Level of Assurance and Engagement Risk
 Limitations of Assurance Engagements

• Selective testing
• Judgment
• Inherent limitations of internal
control
• Persuasive evidence rather
than conclusive
• Characteristics of subject
matter
 Level of Assurance Engagements

Engagement Level of Form of

Engagement Conclusion
Risk
Reasonable Low Positive
(High)
assurance
Limited Greater than for Negative
(Low or a RAE (High)
Moderate)
assurance
 Types of Assurance Engagements

1 Level of assurance

2 Structure
 Structure of Assurance Engagements

Engagement Responsible Party’s Evaluation of

Representation Subject Matter
Attestation Yes Responsible
(Assertion- party
based)
Direct reporting None Practitioner
 Elements of Assurance Engagements

1. Three party relationship

2. Subject matter (appropriate)

3. Criteria (suitable)

4. Evidence (sufficient appropriate)

CREST
5. Report (written assurance)
 Three Party Relationship

Intended Can’t be the RP alone

Users

Accountability Assurance

Responsible
Practitioner
Party
Assertions
(Attestation)
 Subject Matter

• Financial

• Non-financial

• Physical characteristics

• Systems/processes

• Behavior
 Criteria

• Benchmark against subject

matter

• To be suitable:
 Relevant
 Complete
 Reliable
 Neutral
 Understandable
 Evidence

• Basis of
opinion/conclusion
 Written Assurance Report

• Conveys assurance
 Non-assurance Engagements

• Agreed-upon procedures
• Compilations
• Tax (when no assurance conveyed)
• Consulting/advisory
• Testifying in legal proceedings
• Professional opinion not intended as an
assurance report
• Practitioner’s engagements
• Assurance engagement:
 Nature
 Demand
 Types
 Limitations
 Elements
• Non-assurance engagements
-now do the DIY drill-
 DIY Drill Answers
1. A 1. D
2. B
3. C
4. D
 DIY Drill Answers
6. D 6. D
7. B
8. D
9. A
 end of AT.2501 