Chapter 1 Aud Theo
Chapter 1 Aud Theo
TOP
Fun IC #1:
d
aud amen
eng it and tals of
age ass
me uran
nt ce
• Assurance
Services/Engagements:
PAGE 2
Suitable Criteria
Elements of an Assurance
Engagement Written assurance report in the form appropriate to a
reasonable assurance engagement or a limited assurance
engagement
PAGE 3
Criteria refer to the standard or benchmark used to evaluate or
measure the subject matter of an assurance engagement, including,
where relevant, benchmarks for presentation and disclosure. Without
frame of reference provided by suitable criteria, any conclusion is open to
individual interpretation and misunderstanding.
PAGE 4
1. Established criteria – are those criteria that are embodied
in laws or regulations or issued by authorized or recognized
bodies of experts that follow a transparent due process
1.1 Two Types of Criteria
Examples:
2. Specifically developed criteria – those criteria specifically
designed for the purpose of the engagement
PAGE 5
A written assurance report should be in the form
appropriate to a reasonable assurance engagement or a limited
assurance engagement.
2.) Assurance Report
The practitioner should provide a written report containing a
conclusion that conveys the assurance obtained about the
subject matter information. In addition, the practitioner
considers other reporting responsibilities, including
communicating with those charged with governance when it is
appropriate to do so.
PAGE 6
Levels of assurance provided in the written
report:
PAGE 7
Sufficient Appropriate Evidence:
The practitioner shall plan and perform the engagement with an
attitude of professional skepticism to obtain sufficient appropriate
evidence that the assertions are free of material misstatements.
PAGE 8
Appropriate Subject Matter:
Subject matter refers to the information to be
evaluated or measured against the criteria. Subject
matter information means the outcome of the
evaluation or measurement of a subject matter.
PAGE 9
Forms of subject matter of an assurance engagement:
1. Financial performance or conditions (for example,
historical or prospective financial position, financial
performance and cash flows) for which the subject matter
information may be the recognition, measurement,
presentation and disclosure represented in the financial
statements
4.1) Forms of Subject Matter in 2. Non-financial performance or conditions (for example,
Assurance Engagement performance indicators of an entity) for which the subject
matter information may be key indicators of efficiency and
effectiveness
3. Physical characteristics (for example, capacity of a facility)
for which the subject matter information may be a
specifications document
4. Systems and processes (for example, entity’s internal
control or IT system) for which the subject matter information
may be an assertion about effectiveness
5. Behavior (for example, corporate governance, compliance
with regulation, human resource practices) for which the
subject matter information may be a statement of compliance
or a statement of effectiveness
PAGE 10
a. Practitioner – CPA in public practice who performs the
assurance engagement
b. Responsible party – person/s who is responsible for the
5.) Three Party Relationship subject matter or the assertion (subject matter
information)
c. Intended user/s – person, persons or class of persons f
or whom the practitioner prepares the assurance report;
they are the users to whom the practitioner usually
addresses the report
PAGE 11
Responsible party and intended user:
The responsible party and the intended users may be from
different entities or the same entity.
The practitioner may be engaged by the responsible party or
the intended user.
The responsible party can be one of the intended users, but
not the only one.
5.) Three Party Relationship-Key points Whenever practical, the assurance report is addressed to all
the intended users, but in some cases there may be other
intended users. In cases where the CPA may not be able to
identify all intended users, intended users may be limited to
major stockholders with significant and common interests.
In some circumstances, the intended user may be established
by law.
The responsible party may also be one of the intended users.
The intended user may be established by agreement between
the practitioner and responsible party or those engaging or
employing the practitioner.
PAGE 12
1. Audit: The auditor provides a reasonable (high, but not absolute)
level of assurance that the information subject to audit is free of
material misstatement. This is expressed positively in the audit
report as reasonable assurance .
Engagements and level of assurance:
2. Reviews: The auditor provides a moderate/limited level of
assurance that the information subject to review is free of material
misstatement. This is expressed in the form of negative assurance.
3. Agreed-upon procedures: No assurance is expressed. The
auditor simply provides a report of the factual findings. Users of the
report assess for themselves the procedures and findings reported
by the auditor and draw their own conclusions from the auditor's
work.
4. Compilation: Although the users of the compiled information
derive some benefit from the accountant's involvement, no
assurance is expressed in the report.
PAGE 13
Nature, Scope and According to the Philippine Framework for Assurance
Objective of
Engagements, an assurance engagement is
conducted:
Assurance a. To provide a high level of assurance that the
PAGE 14
1. Reasonable assurance engagements –
engagements that provide high, but not
absolute, level of assurance
Types of Assurance Also called high-level engagements
Engagements and their
Objectives: The objective of a reasonable assurance
engagement is a reduction in assurance
engagement risk to an acceptably low level
as the basis for a positive form of expression
of the practitioner’s conclusion.
PAGE 15
2. Limited assurance engagements –
engagements that provide only a “moderate” or
“limited” level of assurance
Types of Assurance
Engagements and their The objective of a limited assurance
Objectives: engagement is a reduction in assurance
engagement risk to an acceptable level
as the basis for a negative form of
expression of the practitioner’s
conclusion. Thus, the risk in limited
assurance engagement is greater than
for a reasonable assurance
engagement.
PAGE 16
• CPA risk advisory
• Business performance measurement services
• Health care performance measurement
services
Other Assurance Services
• Elder Care Plus
• Risk Assessment Services
• CPA Web Trust Service
• Information Systems Reliability
PAGE 17
1. Related services, such as:
Non-Assurance Engagement a. Agreed-upon procedures engagements, and
b. Compilations of financial or other information engagements
1. Tax services (as the preparation of tax returns where no
conclusion conveying assurance is expressed)
2. Consulting (or advisory) engagements, such as management
and tax consulting
PAGE 18
Points of distinction Assurance services Consulting services
PAGE 19
Categories of Services / Engagements
PAGE 20
1. Audit: The auditor provides a reasonable (high, but not absolute)
level of assurance that the information subject to audit is free of
material misstatement. This is expressed positively in the audit
report as reasonable assurance .
Engagements and level of assurance:
2. Reviews: The auditor provides a moderate/limited level of
assurance that the information subject to review is free of material
misstatement. This is expressed in the form of negative assurance.
3. Agreed-upon procedures: No assurance is expressed. The
auditor simply provides a report of the factual findings. Users of the
report assess for themselves the procedures and findings reported
by the auditor and draw their own conclusions from the auditor's
work.
4. Compilation: Although the users of the compiled information
derive some benefit from the accountant's involvement, no
assurance is expressed in the report.
PAGE 21
Non-Assurance Services
Services:
PAGE 22
Evidence Non-Assurance Services
gathering
procedures Assurance Services (Related Services)
Assurance and Non-Assurance Risk assessment, Limited to: Reading of the FS for
Services:
Tests of controls obvious misstatements
and Substantive Inquiry; and As agreed
tests
Analytical
procedures
(The auditor obtains
an understanding of
the entity and its
environment,
including internal
control, but no
evaluation of internal
control is conducted.)
Level of Reasonable
assurance assurance
provided by Moderate (limited) No assurance No assurance
the CPA (High, but not assurance
absolute,
assurance)
Skills used by Audit skills Audit skills Audit skills Accounting skills
the auditor
PAGE 23
AASC Engagement Standards Applications Related Practice
Statements
a. Philippine Standards on FS audit engagements Philippine Auditing
Auditing (PSAs) Practice Statements
(PAPSs)
b. Philippine Standards on Review engagements Philippine Review
Review Engagements (PSREs) Engagement Practice
Pronouncements on Statements (PREPSs)
Assurance Engagements:
c. Philippine Standards on Other assurance Philippine Assurance
Assurance Engagements (PSAEs) engagements dealing Engagement Practice
with subject matters Statements (PAEPSs)
other than historical
financial information
PAGE 24
LET US DO YOUR
PRESENTATION before before
24 HOUR
TURN AROUND
From $11
PER SLIDE
STARTED
Go to 24Slides.com/order
to find out more
PAGE 25
With a full team of
designers, we produce
hundreds of thousands of
slides each year, in dozens
of languages, for thousands
of clients around the world.
Get Started
Go to 24Slides.com/order to find out more
PAGE 26
A SOLUTION FOR YOUR ENTIRE TEAM
• From $4.5 per slide • From $3.8 per slide • From $3.2 per slide
• 24 hour turn around • 24 hour turn around • 24 hour turn around NEED MORE SLIDES?
Ask us about special
• Dedicated Team • Dedicated Team • Dedicated Team enterprise pricing.
As used by
PAGE 27
Online Recruitment
Lorem ipsum dolor sit amet, consectetur
adipiscing elit, sed do eiusmod tempor
incididunt ut labore et dolore magna aliqua.
PAGE 28
Step by Step
01 02 03 04 05 06
Lorem Ipsum Lorem Ipsum Lorem Ipsum
PAGE 29
Lorem Ipsum
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed
do eiusmod tempor incididunt ut labore et dolore magna
aliqua.
Recruitment
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do
eiusmod tempor incididunt ut labore et dolore magna aliqua.
Lorem Ipsum
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor
incididunt ut labore et dolore magna aliqua.
Lorem Ipsum
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut
labore et dolore magna aliqua.
Lorem Ipsum
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et
dolore magna aliqua.
PAGE 30
Recruiting and Hiring Statistics
9%
PAGE 31
Recruitment Pros and Cons
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut
enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.
Lorem ipsum dolor sit amet Lorem ipsum dolor sit amet
Lorem ipsum dolor sit amet Lorem ipsum dolor sit amet
Lorem ipsum dolor sit amet Lorem ipsum dolor sit amet
Lorem ipsum dolor sit amet Lorem ipsum dolor sit amet
Lorem ipsum dolor sit amet Lorem ipsum dolor sit amet
Lorem ipsum dolor sit amet Lorem ipsum dolor sit amet
Lorem ipsum dolor sit amet Lorem ipsum dolor sit amet
PAGE 32
Why Online Recruitment?
Lorem ipsum dolor sit amet, Lorem ipsum dolor sit amet,
consectetur adipiscing elit. consectetur adipiscing elit.
Lorem ipsum dolor sit amet, Lorem ipsum dolor sit amet,
consectetur adipiscing elit. Sed consectetur adipiscing elit. Sed
imperdiet fermentum lectus et imperdiet fermentum lectus et
mollis. Praesent mattis, ante in mollis. Praesent mattis, ante in
accumsan placerat. accumsan placerat.
Lorem ipsum dolor sit amet, Lorem ipsum dolor sit amet,
consectetur adipiscing elit. consectetur adipiscing elit.
Lorem ipsum dolor sit amet, Lorem ipsum dolor sit amet,
consectetur adipiscing elit. Sed consectetur adipiscing elit. Sed
imperdiet fermentum lectus et imperdiet fermentum lectus et
mollis. Praesent mattis, ante in mollis. Praesent mattis, ante in
accumsan placerat. accumsan placerat.
PAGE 33
Advantages of
Online Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do
Recruitment
eiusmod tempor incididunt ut labore et dolore magna aliqua.
Ut enim ad minim veniam, quis nostrud exercitation ullamco
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod
tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim
veniam, quis nostrud exercitation ullamco
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor
incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis
nostrud exercitation
PAGE 34
Lorem ipsum dolor sit amet,
consectetur adipiscing elit.
What About
Lorem ipsum dolor sit amet, consectetur adipiscing
the Selection elit, sed do eiusmod tempor incididunt ut labore et
dolore magna aliqua. Ut enim ad minim veniam,
Process? quis nostrud exercitation ullamco laboris nisi ut
aliquip ex ea commodo consequat.
PAGE 35
Thank
You
Empowering
Talent In
Emerging Markets
Unlike traditional outsourcing, we want to
provide extraordinary value to our
customers by investing our profits into the
design talent in Indonesia.