AUDITING AND ASSURANCE SERVICES QUESTIONS
x x x x
WITH WELL
x x
IRRUSTRATED
ANSWERS
x
What xrisk xcreates xa xdemand xfor xindependent xand xobjective xoutsiders xto xprovide
xassurance xto xdecision-makers? x- xinformation xrisk
What xis xbusiness xrisk x- xthe xrisk x(probability) xthat xan xentity xwill xfail xto xmeet xits xobjectives
xWhat xconditions xincrease xthe xdemand xfor xreliable xinfo x- xcomplexity
remoteness
xtime xsensitivity
xconsequences
assurance x- xthe xlending xof xcredibility xto xinformation
When xassurance xis xprovided xfor xspecific xassertions xmade xby xmanagement, xwe xrefer xto
xthe xassurance xprovided xas x- xattestation
When xassertions xare xembodied xin xa xcompany's xfinancial xstatements, xwe xrefer xto
xthe xattestation xas x . x- xauditing
a xsystematic xprocess xof xobjectively xobtaining xand xevaluating xevidence xregarding
xassertions xabout xeconomic xactions xand xevents xto xascertain xthe xdegree xof
xcorrespondence xbetween xthe xassertions xand xestablished xcriteria xand xcommunicating xthe
xresults xto xinterested xusers x- xauditing
AAA x- xAmerican xAccounting xAssociation
an xengagement xin xwhich xa xpractitioner xis xengaged xto xissue xa xreport xon xthe xsubject
xmatter, xor xan xassertion xabout xsubject xmatter xthat xis xthe xresponsibility xof xanother xparty x-
xattestation xengagement
Examples xof xattestation xengagement x- x-Agreed-upon xprocedures xengagements x(verifying
xinventory xquantities xand xlocations
- Prospective xfinancial xinfo x(analysis xof xprospective xor xhypothetical xFS xfor xsome
xtime xperiod xin xfuture)
- Reporting xon xPro xformat xfinancial xinfo x( xsuch xas xretroactively xanalyzing xthe xeffect
xof xa xproposed xor xconsummated xtransaction x on xthe xhistorical xFS xas xif xthat
xtransaction xhad xalready xoccurred
- compliance xattestation x(ascertaining xa xclients xcompliance xw/ xdebt xcovenants)
xReporting xon xControls xat xa xservice xorg x( xsuch xas xorg xthat xprovide xoutsourced
xprocesses xthat xare xlikely xto xbe xrelevant xto xthe xuser xentities xinternal xcontrol xover
xfinancial xreporting)
Exam xof xmanagement xdiscussion xand xanalysis x(prepared xpursuant xto xthe xrules xand xreg xof
, x SEC)
x x x x
WITH WELL
x x
IRRUSTRATED
ANSWERS
x
What xrisk xcreates xa xdemand xfor xindependent xand xobjective xoutsiders xto xprovide
xassurance xto xdecision-makers? x- xinformation xrisk
What xis xbusiness xrisk x- xthe xrisk x(probability) xthat xan xentity xwill xfail xto xmeet xits xobjectives
xWhat xconditions xincrease xthe xdemand xfor xreliable xinfo x- xcomplexity
remoteness
xtime xsensitivity
xconsequences
assurance x- xthe xlending xof xcredibility xto xinformation
When xassurance xis xprovided xfor xspecific xassertions xmade xby xmanagement, xwe xrefer xto
xthe xassurance xprovided xas x- xattestation
When xassertions xare xembodied xin xa xcompany's xfinancial xstatements, xwe xrefer xto
xthe xattestation xas x . x- xauditing
a xsystematic xprocess xof xobjectively xobtaining xand xevaluating xevidence xregarding
xassertions xabout xeconomic xactions xand xevents xto xascertain xthe xdegree xof
xcorrespondence xbetween xthe xassertions xand xestablished xcriteria xand xcommunicating xthe
xresults xto xinterested xusers x- xauditing
AAA x- xAmerican xAccounting xAssociation
an xengagement xin xwhich xa xpractitioner xis xengaged xto xissue xa xreport xon xthe xsubject
xmatter, xor xan xassertion xabout xsubject xmatter xthat xis xthe xresponsibility xof xanother xparty x-
xattestation xengagement
Examples xof xattestation xengagement x- x-Agreed-upon xprocedures xengagements x(verifying
xinventory xquantities xand xlocations
- Prospective xfinancial xinfo x(analysis xof xprospective xor xhypothetical xFS xfor xsome
xtime xperiod xin xfuture)
- Reporting xon xPro xformat xfinancial xinfo x( xsuch xas xretroactively xanalyzing xthe xeffect
xof xa xproposed xor xconsummated xtransaction x on xthe xhistorical xFS xas xif xthat
xtransaction xhad xalready xoccurred
- compliance xattestation x(ascertaining xa xclients xcompliance xw/ xdebt xcovenants)
xReporting xon xControls xat xa xservice xorg x( xsuch xas xorg xthat xprovide xoutsourced
xprocesses xthat xare xlikely xto xbe xrelevant xto xthe xuser xentities xinternal xcontrol xover
xfinancial xreporting)
Exam xof xmanagement xdiscussion xand xanalysis x(prepared xpursuant xto xthe xrules xand xreg xof
, x SEC)
