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Introduction.............................................................................................. 1
Assurance service.................................................................................... 2
types provide services CPAs......................................................................3
A audit...................................................................................................... 3
A review................................................................................................... 5
A compilation........................................................................................... 6
non-auditing services.................................................................................. 7
nine audit services...................................................................................... 8
bookkeeping or other services relating to the accounting records...........8
Financial Information System Design and Implementation...................9
provided to audit clients........................................................................9
Appraisal or Valuation Services, Fairness Opinions or...........................9
Contribution-In-Kind Reports provided to audit clients..........................9
Actuarial Services provided to audit clients........................................10
Internal Audit Services provided to audit clients.................................11
Management Functions provided to audit clients................................11
Human Resources services provided to audit clients.............................12
Broker Dealer Services provided to audit clients....................................12
Legal Services provided to audit clients.................................................13
Post employment benefits Plan and administration..........................13
Tax Services provided to audit clients.................................................14
Other Services provided to audit clients.............................................14
References................................................................................................. 15
Introduction
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The word, audit, has been derived from the Latin word Audire meaning
to hear. Auditing is a formal examination of accounting books, documents
and vouchers of a business concern in order to verify the profit and loss
and the financial position of a business. Its a systematic check or
assessment of financial records of a business, department or organization
to establish accuracy or efficiency or effectiveness.
The need of audit arises due to the fact that a business enterprise needs
to ensure the correctness of all accounts pertaining to the business. It is
also important to ascertain whether or not, the financial statements, profit
and loss account and balance sheet have been prepared in a way as to
show the summary of the flow of transactions for the whole period and the
true picture and position of a business enterprise. Besides, in order to
ensure the accuracy or the efficiency of the records, detection and
prevention of errors is vitally important. Hence, audit, under its main
objectives and subsidiary objectives fulfills the purpose.
Assurance service
Assurance service is: an independent professional service,
typically provided by Chartered or Certified Public
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Accountants or Chartered Certified Accountant, with the
goal of improving information or the context of information
so that decision makers can make more informed, and
presumably better, decisions. Assurance services provide
independent and professional opinions that reduce
information risk (risk from incorrect information)
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The auditor obtains reasonable assurance about whether the financial
statements as a whole are free from material misstatement, and whether
the misstatements are from error or fraud.
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language such as the financial statements present fairly in all material
respects and in conformity with accounting principles generally accepted
(GAAP) in the United States.
A qualified opinion due to a scope limitation alerts the reader that, except
for the matter to which the qualification relates, the financial statements
present fairly, in all material respects, the companys financial position. If
the scope limitation is severe enough, the auditors may disclaim an
opinion on the overall financial statements.
However, if the auditor concludes that the departures from GAAP are so
significant that the financial statements as a whole are not fairly stated, an
adverse opinion must be issued. An adverse opinion will include language
describing what the auditor believes is materially misstated in the financial
statements, and the effects of the misstatements. If the effects are not
reasonably determinable, the auditors will state that.
A review
A review engagement is conducted to provide limited assurance that there
are no material modifications that should be made to the financial
statements for them to be in conformity with the financial reporting
framework.
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Inquiries as to the accounting practices and principles used by the
business
Knowledge of fraud
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These analytical procedures provide better understanding of key
relationships among certain numbers. This understanding gives more
assurance about the reasonableness of the financial condition presented in
the financial statements.
A compilation
While independence is required at the other levels of service, the CPA does
not have to be independent of your organization to perform a compilation.
The report must state that the accountant is not independent.
Further options lie within the compilation level of service. The compilation
report may be a full disclosure report with complete footnote explanations
of certain amounts and policies contained in the financial statements. Or,
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these otherwise required disclosures may be omitted. Omission of this
information is not permissible under the other levels of service.
It is important to find the proper balance between the cost of the CPAs
services and the level of assurance the users of the financial statements
require.
non-auditing services
Non-audit services may be any services other than audit provided by an
auditor to an audit client. Public accounting firms expanded the scope of
their services to include corporate and individual tax planning, internal
audit outsourcing and consulting related to mergers and acquisitions,
information system (Salehi, 2009 s more economic for auditors to provide
other additional services to their clients, since the auditor already has a
good knowledge of their clients business (Islam et al., 2005a).
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services such as those listed in category (1) above that the auditors are
not required by law to undertake, but where the information largely
derives from the audited financial records
tax compliance, where much of the information derives from the audited
financial records
or consolidated entity.
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F) Create or change journal entries in divisions or subsidiaries of the
parent
company.
following
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i. Valuations for tax related items
v. Debt.
entities.
x. Derivatives.
benefit liabilities.
v. Prospective information.
liabilities.
claims.
ix. Superannuation/pension.
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B) Non-Financial Statement related services to the audit client:
i. Forecasting cash-flow
C) Setting the scope, risk and frequency of the internal audit work.
Audit Committee.
H) Audit firm staff secondments to the internal audit division of the audit
client
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Human Resources services provided to audit clients.
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I) Provide opinions on corporate
D) Contract support
A) Can the auditor act in a fiduciary duty capacity on the audit client's
employment benefit plan? ('theplan').
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Tax Services provided to audit clients.
or subsidiaries.
H)Prepare the income tax calculation for tax compliance and then use this
A) Share-registry services
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F) Corporate Recovery Services.
References
1. Survey On The Regulation Of Non-Audit Services Provided By
Auditors To Audited Companies MARCH 2007 OICU IOSCO
2. Salehi, M. and M. Moradi, 2010. Iranian angle to non-audit
services: Some empirical evidence. Managing Global Transitions
3. Islam, A., W. Karim, M. Khaled and T. van Zijil, 2005. Non-audit
services and auditor independence: An analysis using the
informativeness of earnings.
4. https://en.wikipedia.org
5. http://accounting.smartpros.com/x35824.xml
6. https://www.linkedin.com/in/fareedsiddiqui1
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An-Najah National University
Faculty of Graduate Studies
Master in Accounting
Search for other services provided by
the CPAs
Under the kind supervision:
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Dr: Muiz Abu Alia
Prepared By: Assi out
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