Assurance and Non-
Assurance Services
Audit-Related Services
Review Financial Statement
provides a moderate level of
assurance
Objective
enable the Chartered Accountant to state whether, in all material respects, the financial statements are prepared in accordance with an identified financial reporting framework
General Principles
comply with the “Code of Ethics for
Professional Accountants”
plan and perform the review with an attitude of
professional skepticism
auditor should obtain sufficient evidence through
inquiry and analytical procedures to be able to draw conclusion
Terms of the Engagement
clear understanding between the client and the auditor regarding the engagement
Procedures
a. Obtain an understanding of the entity’s business and the industry in which the entity operates
b. Obtain understanding of the accounting systems and the nature of the entity’s assets, liabilities, revenues and expenses
c. Inquires of the entity’s personnel responsible
d. Inquire about the actions taken at meetings
e. Perform analytical procedures
f. Read financial statement to determine if they conform to identified financial reporting framework
g. For every balance sheet items, perform certain level of audit technique
h. If appropriate, obtain written representations from managemen
Agreed upon procedures
Objective : to report on factual finding and no assurance is expressed
General Principles : comply with the “Code of Ethics for
Professional Accountants”
Procedures
Inquiry and analysis
Re-computation, comparison, and other clerical accuracy clerk
Observation, Inspection and obtaining confirmation
Depends on what has been agreed with client
Compilation of financial information
objective
accountant to use accounting expertise, as opposed to auditing expertise,
collect, classify and summarize financial information, produce a report and no assurance is expressed
General Principles
comply with the “Code of Ethics for Professional Accountants”
Integrity, objectivity, professional competence, due care, confidentiality, professional behavior and technical standards
Terms of the Engagement
clear understanding between the client and the accountant regarding the terms of engagement.
Procedures
Obtained general knowledge of the business
Obtained knowledge about the accounting policies and practices of the industry
A general understanding of the nature of the entity’s business transactions, the form of its accounting records and the qualifications of its accounting personnel
The accounting basis on which the financial statements are to be presented
The accountant should obtain an acknowledgment from management of its responsibility
Other Assurance and Non-Assurance Services
Internal Auditing
independent appraisal function established within an organization to examine and evaluate its activities
Consultation
Management Consultation to client verbally or in writing
Consultancy in public offering of stock, Acquisition of a company, Venture into new business
Secretarial Services
Provide secretarial services to clients, Incorporation of new company, Deregistration of company
Taxation
Compilation of return (on behalf of client), tax planning, advise client on new changes
Accounting
Analyze the financial information and comparing to
budget, previous year and for unfavorable differences
financial forecast and projection
Financial forecasts means prospective financial information prepared based on the assumptions as to future events which management expects to take place
Financial projections means prospective financial information prepared to the best of responsible party’s knowledge and believe
auditor, before accepting the engagement would consider
competency in undertaking task and the client business
intended use of the information
Whether the information will be for general or limited distributions
nature of the assumptions, that is best-estimate or hypothetical assumptions
Reporting consideration
Unmodified Opinion
When the auditor believes that presentation and disclosure of the prospective financial information is adequate
Modified Opinion
When the auditor believes that presentation and disclosure of the prospective financial information is NOT adequate
Due Diligence Audit
process of enquiry and investigation made
on behalf of a prospective buyer
Auditor
required to understand the client’s need, to avoid
wrong audit procedures carried out
Procedures
Review the working papers of previous auditors
Evaluate the valuation of the assets of the company
Review Income Statement to determine accuracy of profits
Carry out analytical review and discuss unusual items
Verify all material items in the balance sheet
Review litigation issues, contingent liabilities, commitments
Forensic audit/Investigation
Often conducted to obtain or develop information as legal evidence
Required to report to the company that has appointed him/her in the case of a regulatory body
Stage of Audit
- Instruction from client
- Communicating with the auditors
- Assessing the aims and probable scope of the investigations
- Obtaining background information
- Deciding the outline of the audit report