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Vid: 2 - Intro To Assurance - Coggle Diagram
Vid: 2 - Intro To Assurance
What is Assurance?
Offering an
Opinion
About
Specific
Information so that users can make
confident decisions
knowing that the risk of the information being incorrect is
reduced
.
5 Elements
3 Parties
Users: Share Holders
Responsible Party: BOD
Practitioner: External Audit / Firm
Subject Matter
: F/S
Sutiable Criteria
: IAS/IFRS
Evidence
: Proof
Written Assurance Report
: Conclusion
Types of Assurance Engagement
Reasonable
: Draw reasonable conclusion
Conforms in all material respect
Positively Worded
e.g. External Audit
provide a true + fair
Why Need an external audit?
in accordance with a financial reporting framework
Limited
: Draw limited conclusion
Lower level of assurance
Negative Worded
e.g. Review Engagement
not as much depth
voluntary
will provide some assurance but less cost/time
Limitations of Audit
Financial Statements include estimates
Doesn't Test all Transactions
Expectation Gap
Test all transactions
Detect all fraud
Auditor prepare the financial statements