Auditing Attestation and Assurance Services Paper 1 Auditing Attestation and Assurance Services Paper ACC 491 Abstract On contrasting and comparing auditing attestation and assurance services one can define the differences and similarities between the three activities the different users of each activity as well as standards and issuing bodies for each service Auditing for 1 Auditing Attestation and Assurance Services Paper 2 example refers to the examination of the accounting data and operational activities of organizations On contrast attest services refer to a function of a CPA issuing written communication expressesing findings about the reliability of a written assertion Similar to attest services assurance services encourages reporting reliable information as the information targets providing independent professional services that improve the quality of information or its context for decision makers quotation The standards applicable to the auditing attesting and assurances services include the generally Accepted Auditing standards GAAS issued by the PCAOB Auditing Auditing is a system of examine of the accounting data and operational activities of the companies organizations and any other type of business The reports of the committee of Auditing concepts of the American Accounting Association defines 2 Auditing Attestation and Assurance Services Paper 3 auditing as a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degrees of correspondence between those assertions and established criteria and communication the results to interested users The three types of auditors include independent internal and government auditor The data that is acquired from the audit is used in many ways by of different users such as investors bank lenders and general management Usually an investor use the data to decide if the stock is worthy of purchasing Lenders use the information to decide whether to give the organization a loan on a project and if the organization will be able to pay back the loan with interest The general management uses the data to make adjustments that would improve the operations of the organization by making better decisions in how the organization is running their operation An independent auditors work mostly with corporation to conduct financial statement audits compliance audits and generational audits Internal auditors as separated person must evaluate the activity of the organization to add value and improve the organization operations It aids in accomplishing any objective that may be corrupt they take an approach to evaluate and improve and risk management and internal control procedures of the organization An external auditor used mostly by public accounting firms staff and they review and evaluate accounting policies and procures of the organization to ensure that all controls are in place The external auditor has the fiduciary burden to ensure that the public and shareholders are getting accurate financial reports Internal auditors must adhere to the Sarbanes Oxley Act Government auditors usually work for the government agency state or local and they evaluate financial activity of the government agency financial statements 3 Auditing Attestation and Assurance Services Paper 4 Attest service Attest service in which the CPA firm issues a written communication that expresses a conclusion about the reliability of a written assertion done by another party In recent years growing recognition of the skills and experience of CPAs has resulted in a demand from clients regulating agencies and others for a variety of attest services An example of an attest service includes the examination of financial statements in which the CPA issues a positive expression of opinion on whether or not management s assertion reflects fairly information and conformity with established criteria The types of attestation services that companies may request concerning matters related to the assertion provided in its financial statements In general terms attestation services tend to fall within the area of verifying compliance For example a company may request attestation reports on the financial information recorded for particular entry of the financial statements or for a particular division or unit of its operations Attestation service also effective to provided to verify the soundness compliance or effectiveness of certain element of the internal controls system Attest services previously limited to express a positive opinion on historical financial statements on the basis of an audit in accordance with generally accepted auditing standards GAAS Increasingly CPAs provide more assurance services on the representations other than historical financial statements and in forms other than the positive opinion In responding to these needs certified public accountants have been able to generally apply the basic concepts underlying GAAS to these attest services The attestation standards are a natural extension of the 10 generally accepted auditing standards Like the auditing standards the attestation standards deal with the need for 4 Auditing Attestation and Assurance Services Paper 5 technical competence independence in mental attitude due professional care adequate planning and supervision sufficient evidence and appropriate reporting however they are much broader in scope Assurance services Assurance services defined as independent professional services that improve the quality of information or its context for decision makers quotation Assurance services focus on improving the reliability of information that decision makers use when researching a company for such things as investment These services encompass all auditing services and attestation services each offering a different level of assurance Levels of Assurance The levels of assurance offered in each service include reasonable assurance negative assurance review level assurance agreed upon procedures and compilation without assurance The highest level of assurance refers to reasonable but unguaranteed assurance In order for the CPA conducting an audit to provide a positive opinion the CPA must obtain sufficient and competent evidence The next level negative assurance or review level assurance simply states the unawareness of the CPA of any material modifications that should be made to management s assertion The level of assurance obtained from