chapter 21 assurance, attestation, and internal auditing services copyright © 2012 by the...

Chapter 21Chapter 21Assurance, Assurance,

Attestation, and Attestation, and Internal Auditing Internal Auditing

ServicesServices

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Assurance ServicesAssurance Services

Assurance services are independent

professional services that improve the

quality of information, or its context, for decision makers.

LO# 1

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LO# 1

Assurance ServicesAssurance Services

21-3

Types of Assurance ServicesTypes of Assurance Services

Risk Assessment

Business Performance Measurement

Information System

Reliability

Electronic Commerce

Health Care Performance

Measurement

PrimePlus

LO# 2

21-4

Attest EngagementsAttest Engagements

Attest services occur when a practitioner is engaged to

issue, or does issue, an examination, a review, or an

agreed upon procedures report on subject matter, or an assertion about subject

matter, that is the responsibility of another

party.

LO# 3

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LO# 3

Attest EngagementsAttest EngagementsFigure 21-3

21-6

Types of Attest Engagements Types of Attest Engagements

Attest Engagements

Examination

Review

Agreed-Upon

Procedures

LO# 4

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Attestation StandardsAttestation Standards

Attestation Standards

General Fieldwork Reporting

LO# 5

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Reporting on an Entity’s Internal Reporting on an Entity’s Internal Control over Financial ReportingControl over Financial ReportingThe Federal Deposit Insurance Corporation Improvement Act of 1991 requires that the

management of large financial institutions issue a report on the effectiveness of the institution’s

internal control and that they engage accountants to attest to management’s report.

The Sarbanes-Oxley Act of 2002 imposed similar requirements on all publicly held

companies.

LO# 6

21-9

Financial ForecastsFinancial Forecastsand Projections and Projections

CPAs can be engaged to examine, apply agreed-upon procedures, or compile the prospective

financial statements if such statements are expected to be used by a third party.

LO# 7

21-10

Accounting and Review ServicesAccounting and Review Services

Compilations Reviews

Many nonpublic companies do not choose to contract for an audit of their financial statements.

However, these entities often employ a CPA to assist with preparing their financial statements, tax

returns, or other financial documents.

LO# 8

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Internal AuditingInternal Auditing

Internal auditing is an independent, objective assurance and consulting activity designed to add value and

improve an organization’s operations.

It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate

and improve the effectiveness of risk management, control, and governance processes.

LO# 9

21-12

Internal AuditorsInternal Auditors’’ Roles Roles

Evaluating Risks and Controls

Reviewing Compliance

Financial Auditing Operational Auditing

LO# 9

21-13

Trust Services Trust Services

Security

Availability

Processing Integrity

Online Privacy

Confidentiality

Five Principles Five Principles of Trust of Trust ServicesServices

LO# 10

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End of Chapter 21End of Chapter 21

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