Assurance Services Paper – Introduction Essay Example

be used to project or forecast the effects of certain transactions. Assurance services may include risk assessment, reliability of systems, business performance measurement, or compliance with policies (Elliott & Pallais, 1997), which is obviously, a specific examination and a specific report.

Assurance services might involve the type of reports provided in more traditional attestation engagements or they might provide less structured communications, such as reports without explicit conclusions or reports are issued only when there are problems. Assurance services are often desired to be more customized to the information needs of decision-makers in specific circumstances.

To be responsive to those needs, the form of CPA communication is expected to be more flexible. Thus, a significant difference between assurance and attestation engagements is that assurance engagements do not necessarily result in a standard form of a report, whereas attestation engagements (and more familiar audits and reviews) do.

Examples of each type of service/who might request such a service Reliable information is the foundation of many decisions in the business world.

The purpose of the financial statement is to make sure that the financial statement provides reasonable assurance that the financial statement are free from material misstatement and comply with the generally accepted accounting principles (GAAP) (Boynton & Johnson, 2006). Auditing services, attestations services, and assurance services are the type of services that certified public accountants (CPA), CPA firm, and related professionals provide to clients. The three types of service have similarities, differences.

Auditing is “a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested

users” (Boynton & Johnson, 2006, p. 6).

Audit is one type of assurance service and focuses on depicting the information contained on the four financial statements such as the balance sheet, income statement, statement of cash flow, and the statement of retained earnings.

An example of auditing service is the financial statement audit provided by public CPA firm to making sure that financial statements are in accordance with GAAP. The auditors will provide the conclusion of their discoveries to interested users and provide reasonable assurance whether the company is likely to carry its activity for the next year also known as going concern. The government, internal service revenue, lenders, creditors, stockholders, investors and other stakeholders might request the financials statement audit for sound decisions.

Assurance services are “independent professional services that improve the quality of information, or its context, for decision makers” (Boynton & Johnson, 2006, p. 11).

Assurance services include financial information and non-financial information. Examples of assurance services are Internet Website certification (WebTrust), business risk assessment (Risk Advisory), accounts receivable review and cash enhancement, third-party reimbursement maximization, rental property operations review, customer satisfaction surveys, evaluation of investment management policies, fraud and illegal acts of prevention, and deterrence are some examples.

The audit committee board, stockholders, investors, management, lenders and other parties at stake might request assurances services. Attestation service is the written communication by certified public accountants, which expression conclusion about the third party (Boynton & Johnson, 2006). Examinations of expected financial statements and entity compliance with law and regulation such as the Sarbanes-Oxley Act are examples of attestation services.

The management relies heavily on this type of assurance. What standards apply to each service and

who establishes those standards.