Chapter 1- Demand for Audit and Assurance Services
Assurance Services- Are the independent professional services that improve the quality of information for decision makers. Individuals who are responsible for making business decisions seek assurance services to help improve the reliability and relevance of the information used as the basis for their decisions. Assurance services are valued because the assurance provider is independent and perceived as being unbiased with respect to the information examined. The demand for assurance services is expected to grow as the demand for forward looking information increases as more real time information becomes available through the internet. Attestation Services- A type of assurance service in which the public accounting firm issues written communication that expresses a conclusion about the reliability of a written assertion of another person. There are three categories of attestation services; audit of historical financial statements, review of historical financial statements and other attestation services. Audit of historical financial statements- A form of attestation service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with accounting standards. Publicly traded companies in Australia are required to have audits under the Corporations Act. Review of historical financial statements- Another type of attestation service performed by public accountants. A review service provides a moderate amount of assurance on the financial statements, and less evidence is necessary to support this level of assurance. A review is provided at a much lower cost and Public Companies are required by the Corporations Act to have their half year financial statements either audited or reviewed by the entity’s auditor. Other attestation services- Public accountants provide numerous other attestation services, many of these services are a natural...
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