 Assurance on the balloting of contests

Chapter 1

 Academy awards
Fundamentals of Assurance  Reporting on compliance with laws, rules and regulations

Services Elements of assurance services

- Three-party relationship
 Practitioner (CPA), responsible party and intended users
The Concept of Assurance - Appropriate subject matter
Reliable information - Suitable criteria
- Fairly stated - Sufficient appropriate evidence
- Presents a true and fair view of what it purports to be - Written assurance report
- Reliability of information depends on:  In the form appropriate to a reasonable/limited assurance
 Credibility of the source of information engagement
 Ability to verify its accuracy or fairness *All must be present for an engagement to be classified as an assurance
- “TO ASSURE” engagement.
 To give confidence or conviction
Three-Party Relationship
Assurance Services Practitioner
Assurance services/engagements - Broader than the term “auditor”
- AUDITOR
- Three-party contracts in which assurers (such as CPAs) report on
the QUALITY OF INFORMATION  Relates only to practitioners performing audit or review
- Intended to enhance the CREDIBILITY OF INFORMATION engagements with respect to historical financial information
about a subject matter (such as financial statements) by - A practitioner SHOULD NOT ACCEPT an engagement if
evaluating whether the subject matter conforms in all material preliminary knowledge of the engagement circumstances
respects with suitable criteria indicates that ethical requirements regarding professional
- Examples: competence will not be satisfied. *(p. 5)
 Audits of FS of listed and non-listed entities
 assurance engagement regarding a report it has
Responsible party prepared about its own sustainability practices
- Person/s responsible for the subject matter (SM) or the subject
matter information (SMI) [the assertion] in an assurance
engagement
Intended users
- May or may not be the party who engages the practitioner (the - Person/s or class of persons whom the practitioner prepares the
engaging party) assurance report
- Ordinarily provides the practitioner with a written representation - The responsible party can be one of the intended users, BUT
that evaluates or measures the subject matter against the NOT THE ONLY ONE.
identified criteria, whether or not it is to be made available as an - *(p.6)
assertion to intended users People involved in determining engagement requirements
Financial statement audit - Whenever practical, intended users or their represantatives are
SUBJECT Financial position, financial performance and involved with the practitioner and the responsible party (and the
MATTER cash flows of an enterprise engaging party, if different) in determining the requirements of
Financial statements of an enterprise (balance the engagement.
SUBJECT
sheet, income statement, statement of changes - Regardless of the involvement of others however, the
MATTER
in equity, statement of cash flows, and related PRACTITIONER is responsible for determining the nature,
INFORMATION
notes)
timing and extent of procedures to be performed in the
RESPONSIBLE
Client or entity engagement engagement.
PARTY
- In addition, the PRACTITIONER is required to pursue any
Extent of responsibility of the responsible party matter which the practitioner becomes aware of where such
(Philippine Framework for Assurance Engagements) matter may lead to a MATERIAL ADJUSTMENT OR
Responsible MODIFICATION to the subject matter.
Sample Assurance Engagement
for… Assurance Engagements for a Specific Purpose
A government organization engages a practitioner - In some cases, intended users impose a requirement on or request
to perform an assurance engagement regarding a
the responsible party (or engaging party, if different) to arrange
SMI only report about a private company’s sustainability
practices that the organization has prepared and is for, an assurance engagement to be performed for a SPECIFIC
to distribute to intended users PURPOSE.
SM and SMI An entity engages a practitioner to perform an
 - When engagements are designed for specified intended users or a Suitable Criteria (SC)
specific purpose, the practitioner considers including a - Required for REASONABLY consistent evaluation/measurement
RESTRICTION in the assurance report that limits its use to those of a SM within the contest of professional judgment
users or that purpose. - Without the frame of reference provided by SC, any conclusion is
Subject Matter open to individual interpretation and misunderstanding.
Appropriate Subject Matter - Context-sensitive
- Identifiable, capable of consistent evaluation/measurement  Relevant to the engagement circumstances
against the identified criteria, and capable of being subjected to - For the same SM, there can be different criteria.
procedures for gathering sufficient appropriate evidence - The evaluation/measurement of a SM merely on the basis of the
- Characteristics: practitione’s own expectations, judgments, and individual
 Qualitative vs. quantitative experiences WOULD NOT constitute suitable criteria.
 Objective vs. subjective Characteristics of Suitable Criteria
 Historical vs. prospective - RELEVANCE
 Relates to a point in time vs. covers a period  Contribute to conclusions that ASSIST DECISION-MAKING
- Such characteristics affect the precision with which the SM can by the intended users
be evaluated or measured against criteria and the persuasiveness - COMPLETENESS
of available evidence.  Criteria are sufficiently complete when relevant factors that
- *Table 1-5 (p. 7) could affect the conclusions in the context of engagement
Suitable Criteria circumstances are NOT OMITTED.
Criteria  Complete criteria include, where relevant, benchmarks for
- Benchmarks used to evaluate/measure the subject matter presentation and disclosure.
 Including, when relevant, benchmarks for presentation and - RELIABILITY
disclosure  Allows reasonably consistent evaluation/measurement of the
- Formal or less formal SM including where relevant, presentation and disclosure
- *Table 1-6 (p. 8) - NEUTRALITY
- Less formal criteria  Contributes to conclusions that are FREE FROM BIAS
 Internally developed code of conduct - UNDERSTANDABILITY
 Agreed level of performance  Contribute to conclusions that are:
  CLEAR
 COMPREHENSIVE
 NOT SUBJECT TO SIGNIFICANTLY DIFFERENT
INTERPRETATIONS
Established Criteria and Specifically Developed Criteria
Established Criteria
- Those embodied in laws or regulations, or issued by authorized or
recognized bodies of expe