Scribd Logo
Upload

Welcome to Scribd!

  • 13 views

    Audit & Assurance PowerPoint

    Uploaded by

    David John
    This document discusses the key concepts of assurance engagements. It defines assurance as an engagement where a practitioner expresses a conclusion to enhance confidence in an evaluation or measurement against criteria. There are three parties in an assurance engagement: the practitioner, responsible party, and intended users. Assurance engagements involve gathering sufficient appropriate evidence on a subject matter based on suitable criteria. There are two types of assurance engagements: reasonable assurance (audit) and limited assurance (review). An audit is an example of a reasonable assurance engagement where the auditor provides an opinion on whether financial statements conform to applicable criteria.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Audit & Assurance PowerPoint

    Uploaded by

    David John
    13 views26 pages
    This document discusses the key concepts of assurance engagements. It defines assurance as an engagement where a practitioner expresses a conclusion to enhance confidence in an evaluation or measurement against criteria. There are three parties in an assurance engagement: the practitioner, responsible party, and intended users. Assurance engagements involve gathering sufficient appropriate evidence on a subject matter based on suitable criteria. There are two types of assurance engagements: reasonable assurance (audit) and limited assurance (review). An audit is an example of a reasonable assurance engagement where the auditor provides an opinion on whether financial statements conform to applicable criteria.

    Original Description:

    Assurances

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document discusses the key concepts of assurance engagements. It defines assurance as an engagement where a practitioner expresses a conclusion to enhance confidence in an evaluation or measurement against criteria. There are three parties in an assurance engagement: the practitioner, responsible party, and intended users. Assurance engagements involve gathering sufficient appropriate evidence on a subject matter based on suitable criteria. There are two types of assurance engagements: reasonable assurance (audit) and limited assurance (review). An audit is an example of a reasonable assurance engagement where the auditor provides an opinion on whether financial statements conform to applicable criteria.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    13 views26 pages

    Audit & Assurance PowerPoint

    Uploaded by

    David John
    This document discusses the key concepts of assurance engagements. It defines assurance as an engagement where a practitioner expresses a conclusion to enhance confidence in an evaluation or measurement against criteria. There are three parties in an assurance engagement: the practitioner, responsible party, and intended users. Assurance engagements involve gathering sufficient appropriate evidence on a subject matter based on suitable criteria. There are two types of assurance engagements: reasonable assurance (audit) and limited assurance (review). An audit is an example of a reasonable assurance engagement where the auditor provides an opinion on whether financial statements conform to applicable criteria.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 26

    Saifuddin Khan, PhD, ACCA

    Associate Professor
    Dept. of Accounting and Information Systems
    University of Rajshahi
    01777018158
    [email protected]

    Course No. – 310 (Advanced Audit


    and Assurance)
    Corporate Governance, Audit and
    Assurance

    2
    What is assurance?
    An assurance engagement is: '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.'
    International Audit and Assurance
    Standards Board(IAASB)
    Giving assurance means: offering an
    opinion about specific information so the
    users of that information are able to
    make confident decisions knowing that
    the risk of the information being
    'incorrect' is reduced.
    Assurance

    Reduce
    Risk Increase
    Confidence
    Elements of an Assurance
    Engagement
    • A three party relationship involving a
    practitioner, a responsible party, and intended
    users
    • An appropriate subject matter
    • Suitable criteria
    • Sufficient appropriate evidence
    •A written assurance report in the form
    appropriate
    Three Party Relationship
    • Practitioner: for example an auditor. Responsible
    for determining the nature, timing and extent of
    procedures and must pursue doubts and queries
    • A responsible party: the person responsible for
    the information and assertions
    • The intended users: the person(s) for whom the
    practitioner prepares the assurance report. The
    responsible party can be one of the intended
    users.
    Subject matter
    Many types:
    • Financial performance
    • Non-financial performance e.g. the key indicators
    of efficiency and effectiveness.
    • Physical characteristics e.g. capacity of a facility.
    • Systems and processes e.g. an entity’s internal
    control or IT system
    • Behaviour e.g.- corporate governance,
    compliance with regulation
    Suitable Criteria
    Criteria are the benchmarks used to evaluate or
    measure the subject matter. Without the frame
    of reference provided by suitable criteria, any
    conclusion is open to individual interpretation
    and misunderstanding.
    Examples:
    • Financial Statements: IFRS
    • Internal Control: an internal control framework.
    • Compliance: the applicable law, regulation or
    contract.
    They must be available to intended users
    Sufficient appropriate evidence

    • Professional scepticism
    • Sufficient, appropriate evidence

    Sufficiency = quantity of evidence.


    Appropriateness = quality of evidence
    (relevance and its reliability)
    Assurance Report

    A written report containing a


    conclusion is provided to the
    intended users.
    Types of assurance engagement

    The IAASB International Framework for


    Assurance Engagements permits two
    types of assurance engagement:

    • Reasonable assurance engagement


    (Audit)
    • Limited assurance engagement
    (Review Engagement)
    Reasonable assurance engagements
    In a reasonable assurance engagement, the
    practitioner:
    • Gathers sufficient appropriate evidence to be
    able to draw reasonable conclusions.
    • Concludes that the subject matter conforms in
    all material respects with identified suitable
    criteria.
    • Gives a positively worded assurance opinion.
    Positive form (reasonable assurance engagement):
    “In our opinion internal control is effective, in all
    material respects, based on XYZ criteria.”
    Limited assurance engagement
    In a limited assurance assignment, the practitioner:
    • Gathers sufficient appropriate evidence to be able
    to draw limited conclusions.
    • Concludes that the subject matter, with respect
    to identified suitable criteria, is plausible in the
    circumstances.
    • Gives a negatively worded assurance opinion.
    Negative form (limited assurance engagement):
    “Based on our work described in this report,
    nothing has come to our attention that causes us to
    believe that internal control is not effective, in all
    material respects, based on XYZ criteria.”
    It is often not possible to check the situation yourself

    Skill? Time? Location?

    Therefore rely on someone else

    Standards?
    How much checking?

    Report

    Audit is an example of assurance engagement


    Audit Defined
    An audit is still a key example of and
    assurance service in Bangladesh, where all
    registered companies are required to have
    audits by law.

    An audit is an official examination of the


    accounts (or accounting systems) of an
    entity (by an auditor).
    The main objective of an audit is to
    enable an auditor to convey an opinion
    as to whether or not the financial
    statements of an entity are prepared
    according to an applicable financial
    framework.
    Definition of Audit
    • The word 'audit' comes from the Latin
    audire meaning to hear.
    • An auditor is defined in Chamber dictionary
    as: a hearer: one who audits accounts.
    • The auditors were deputed to hear
    suspected cases of irregularities, corruption,
    fraud and other serious offences in medieval
    times.
    Auditor-Financial Watchdog
    Why audit is needed?
    Agency Theory:
    Share Holders

    Accountability
    Audit Director

    Employee
    Corporate Governance and Audit
    - Audit committee
    - Role of audit committee and its impact on
    audit and assurance
    Financial-Reporting-Act-2015
    MONEY LAUNDERING
    Money laundering is the process by which
    criminals attempt to conceal the true origin and
    ownership of the proceeds of their criminal
    activity. In order to be able to spend money
    openly, criminals will seek to ensure that there
    is no direct link between the proceeds of their
    crime and the actual illegal activities
    MONEY LAUNDERING
    Anti money laundering procedures

    The firm must gather know your client information


    (KYC) to assist in spotting suspicious transactions.
    This includes:
    • 1. Who the client is
    • 2. Who controls it
    • 3. The nature of the client
    • 4. The client’s sources of funds
    • 5. The client’s business and economic purposes.
    • Case analysis

    You might also like