Kế toán, kiểm toán - Chapter 14: Other assurance services

Establishing suitable criteria for testing controls is a key aspect. If entity clearly sets out what constitutes a satisfactory IC system, then easier for auditor to audit. There is no suitably detailed description of IC that would serve as audit criteria for all entities. Should assess both design and operating effectiveness of IC systems.

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CHAPTER 14OTHER ASSURANCE SERVICES1Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettA REVIEW OF LEVELS OF ASSURANCEForm of engagementLevel of assuranceExpression of opinionaudithighpositivereviewmoderatenegativeagreed upon proceduresnilreport of factual findings2Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettREVIEW ENGAGEMENTSUsed when moderate rather than high level of assurance deemed appropriateReport provides negative assurance of whether anything has come to auditor’s attention that causes auditor to believe subject matter not fairly presented3Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettEVIDENCE COLLECTION PROCEDURES FOR REVIEWSIn planning for a review engagement, knowledge of entity is vital.Major evidence collection procedures:Inquiries of managementAnalytical procedures4Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettREPORTING OF REVIEW RESULTSImportant that client and user understandthat a review is being undertaken, not an audit:Engagement letter and discussion with client must ensure that differences between review and audit are understoodReview report must clearly show that lower level of assurance than with an audit is provided5Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettEXAMPLE OF AN UNQUALIFIED REVIEW REPORT6Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettAGREED-UPON PROCEDURESSuch procedures are broad-ranging and canbe in any area where the client and userperceive them to be beneficial. For example:Accounts payable listing is complete and accurateAcademy Awards votes confidentially maintained and properly counted7Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettIMPORTANCE OF UNDERSTANDING WHAT IS AGREED UPONEngagement letter should clearly set out:Nature of engagement, and the fact that procedures performed are not an audit or reviewList of procedures to be performed as agreedAnticipated form of reportRestrictions on distribution of report8Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettASSURANCE SERVICES ON FINANCIAL INFORMATION OTHER THAN GENERAL PURPOSE REPORTSSpecial purpose reportsComponents of financial reportsSummarised financial reportsDue diligence engagements9Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettASSURANCE SERVICES REQUIRED BY SPECIFIC LEGISLATION OR REGULATIONSFuture-oriented (prospective) financial informationInternal controls, e.g. superannuation reporting obligationsStatistical or highlight-style information, e.g. reporting by authorised deposit-taking institutions (e.g. banks and building societies) for national regulator (Australian Prudential Regulation Authority - APRA)10Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettASSURANCE SERVICES OTHER THAN FINANCIAL REPORT ASSURANCE CURRENTLY BEING PROVIDED11Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettPROSPECTIVE FINANCIAL INFORMATIONForecasts — prepared on basis of assumptions of future events expected to take place, and reflect expected future position.Projections — present hypothetical courses of action and prepared on basis of assumptions not necessarily expected to take place.12Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettREPORTING OF PROSPECTIVE FINANCIAL INFORMATIONTwo levels of assurance contained in report:Moderate assurance provided on best estimate assumptionsPositive assurance provided as to prospective financial information being prepared in accordance with assumptions (e.g. calculations), fairness of presentation13Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettIMPORTANCE OF REPORTING ON INTERNAL CONTROLSBecoming more common owing to greater emphasis on corporate governanceIncreased demand for this information by management, directors and some regulatory bodies14Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettREPORTS ON INTERNAL CONTROL (IC)Establishing suitable criteria for testing controls is a key aspect. If entity clearly sets out what constitutes a satisfactory IC system, then easier for auditor to audit. There is no suitably detailed description of IC that would serve as audit criteria for all entities.Should assess both design and operating effectiveness of IC systems.15Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettREPORTING ON STATISTICAL OR HIGHLIGHT INFORMATIONPotential growth area for assurance servicesCommonly provided, either as part of or separate from a financial reportCurrently auditor provides no assurance on such information but must review for misstatements of fact or material inconsistencies (Refer Ch. 13)Auditor could provide separate assurance on this information16Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger SimnettNEW AND EVOLVING ASSURANCE SERVICESMany possibilities but the following are currentlyprovided or proposed, and expected to have highgrowth prospectus:Risk assessment (p. 652) Business performance measurement (pp. 652-653)Assurance for e-commerce — business to consumer: WebTrust (pp. 653)Assurance for e-commerce — business to business: SysTrust (pp. 654)Elder care (pp. 654-655)Assurance on information provided to boards directors by management (pp. 655-656)17Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Auditing and Assurance Services in Australia by Gay & SimnettSlides prepared by Roger Simnett

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