CHAPTER

The Assurance Services

1 Market
Learning Objectives
After studying this chapter, you should be able to:
1. Describe auditing.
2. Distinguish between auditing and accounting.
3. Explain the importance of auditing in reducing information risk.
4. List the causes of information risk, and explain how this risk can be reduced.
5. Describe assurance services and distinguish audit services from other assurance and
nonassurance services provided by CPAs.
6. Differentiate the three main types of audits.
7. Identify the primary types of auditors.
8. Describe the requirements for becoming a CPA.
 Learning Objective 5

Describe assurance services

and distinguish audit services
from other assurance and
nonassurance services
provided by CPAs.
 Learning Objective 5
Assurance Services Describe assurance
services.

ASSURANCE SERVICES

ATTESTATION SERVICES

Audits Reviews
Internal Control Certain
over Financial Reporting Management
Consulting
Other Attestation Services
(e.g., WebTrust, SysTrust)

Other Assurance Services

LO 5
 Learning Objective 5
Assurance Services Describe assurance
services.

An assurance service is an independent

professional service that improves the
quality of information for decision makers.

Assurance services can be performed by

CPAs or by a variety of other professionals.

LO 5
 Learning Objective 5
Attestation Services Describe assurance
services.

An attestation service is a type of assurance

service in which the CPA firm issues a
report about the reliability of an assertion
that is the responsibility of another party.

LO 5
 Learning Objective 5
Attestation Services Describe assurance
services.

1. Audit of historical financial statements

2. Attestation of internal control over financial
reporting
3. Review of historical financial statements
4. Attestation services on information technology
5. Other attestation services

LO 5
 Learning Objective 5
Other Assurance Services Describe assurance
services.

Most of the other assurance services that CPAs

provide do not meet the formal definition
of attestation services.

The CPA is not required to issue a written report.

The assurance does not have to be about the

reliability of another party’s assertion about
compliance with specified criteria.
LO 5
 Learning Objective 5
Other Assurance Services Describe assurance
services.

 Compliance with trading policies and procedures

 Compliance with entertainment royalty agreements

 ISO 900 certification

 Environmental audit

LO 5
 Learning Objective 5
Nonassurance Services Describe assurance
services.

NONASSURANCE SERVICES

Other Management
Consulting

Certain
Accounting and
Management
Consulting Bookkeeping

Tax
Services

LO 5
 Learning Objective 5
Nonasssurance Services Describe assurance
services.

1. Accounting and bookkeeping services

2. Tax services
3. Management consulting services

LO 5
 Learning Objective 1

Describe auditing.
 Learning Objective 1
Nature of Auditing Describe auditing.

Auditing is the accumulation and evaluation

of evidence about information to determine
and report on the degree of correspondence
between the information and established criteria.

Auditing should be done by a competent,

independent person.

LO 1
Nature of Auditing
Learning Objective 1
Describe auditing.

 Information and established criteria.

 Accumulating and evaluating evidence.

 Competent, independent person.
 Reporting.

LO 1
 Learning Objective 1
Information and Established Criteria Describe auditing.

To do an audit, there must be information in a

verifiable form and some standards (criteria)
by which the auditor can evaluate the information.

Criteria
DSAK IASB

LO 1
Accumulating and Evaluating Learning Objective 1
Describe auditing.
Evidence

Evidence is any information used by the auditor

to determine whether the information being
audited is stated in accordance with the
established criteria.

Transaction
data Written and
electronic Observations
Communications
with outsiders
Client inquiry

LO 1
Competent, Independent Person Learning Objective 1
Describe auditing.

Judgment and
Competence
Experience

Independence

Evaluation
of Evidence

Proper
Conclusion
LO 1
Reporting Learning Objective 1
Describe auditing.

The final stage in the auditing process is

preparing the Audit Report, which is the
communication of the auditor’s findings to users.

LO 1
Audit of a Tax Return Example Learning Objective 1
Describe auditing.

Information
Competent, Federal tax
independent returns filed
person by taxpayer

Internal Report on results

Revenue
agent Determines Report on tax
correspondence deficiencies
Accumulates and
evaluates evidence Established criteria

Examines cancelled Internal Revenue

checks and other Code and all
supporting records interpretations

LO 1
 Learning Objective 6

Differentiate the three main

types of audits.
 Learning Objective 6
Types of Audits Differentiate the three main
types of audits.

 Financial Statement

 Operational

 Compliance

LO 6
 Audit of Historical Financial Learning Objective 6
Differentiate the three main
Statements types of audits.

Annual audit of Boeing’s financial

Example
statements

Information Boeing's financial statements

Established Generally accepted accounting

Criteria principles
Available Documents, records, and outside
Evidence sources of evidence

LO 6
 Learning Objective 6
Operational Audit Differentiate the three main
types of audits.

Evaluate computerized payroll system

Example
for efficiency and effectiveness
Number of records processed, costs of
Information
the department, and number of errors
Established Company standards for efficiency and
Criteria effectiveness in payroll department
Available Error reports, payroll records, and
Evidence payroll processing costs

LO 6
 Learning Objective 6
Compliance Audit Differentiate the three main
types of audits.

Determine whether bank requirements

Example
for loan continuation have been met

Information Company records

Established
Loan agreement provisions
Criteria
Available Financial statements and
Evidence calculations by the auditor

LO 6
 Learning Objective 7

Identify the primary types

of auditors.
 Learning Objective 7
Types of Auditors Identify the primary types of
auditors.

 Independent certified public accounting firms

 Governmental general accounting office auditors

 Internal Revenue agents

 Internal auditors

LO 7
Relationships Among Auditors, Client, and
External Users

Client or audit Auditor issues

committee hires report relied
auditor
Auditor upon by users to reduce
information risk

Provides capital
External
Client
Users
Client provides financial
statements to users
Peta Mata Kuliah Auditing

Sektor Komersial Sektor Pemerintahan

Keuangan KAP BPK RI

Operasional/Kinerja

Kepatuhan/PDTT

Internal SPI/UAI APIP

 Learning Objective 2

Distinguish between auditing

and accounting.
 Learning Objective 2
Accounting vs Auditing Distinguish between
auditing and accounting.

Accounting is the recording, classifying,

and summarizing of economic events
for the purpose of providing financial
information used in decision making.

Auditing is determining whether

recorded information properly
reflects the economic events that
occurred during the accounting period.

LO 2
 Learning Objective 2
Auditing vs Accounting Distinguish between
auditing and accounting.

Accounting
Recording of
transactions and
preparation of
financial statements GAAP
(the link)

Evaluation of
financial
statements

Auditing
 Learning Objective 3

Explain the importance of auditing

in reducing information risk.
 Learning Objective 3
Economic Demand for Auditing Explain the importance of
auditing in reducing
information risk.

Information risk reflects the possibility that

the information upon which the business
risk decision was made was inaccurate.

Auditing can have a significant effect

on information risk.
 Learning Objective 4

List the causes of information

risk, and explain how this risk
may be reduced.
 Learning Objective 4

Causes of Information Risk

List the causes of information
risk, and explain how this risk
may be reduced.

 Remoteness of information

 Biases and motives of the provider

 Voluminous data

 Complex exchange transactions

 Learning Objective 4

Reducing Information Risk

List the causes of information
risk, and explain how this risk
may be reduced.

 User verifies information

 User shares information risk with management

 Audited financial statements are provided

Pertanyaan?

SELESAI