An Auditor’s

Services

Anggota Kelompok:

1. Fazlan Muallif Resnulis

2. St Fauziyah Nurul Amri
Assurance and Non- Assurance Services

International Framework of Auditor Services

ISA (audit)

Audit & Review of Historical

Fin. Information

ISRE (review)
Assurance Engagements

Assurance except audit &

Scope of Services Adressed ISAE
review
by the IAASB

Non Assurance Engagement

Ex: Compilation, ISRS
Consultation, SPT Tahunan

Fazlan Muallif – St Fauziyah Nurul

Example……

Assurance Services Non Assurance Services

Internal Audit Outsourcing Bookkeeping and Accounting

Business Risk Assessment Tax Services (ex: SPT Tahunan)

Information System Security Review Certain consultancy Management

Customer Satisfaction Review Other Management Consultancy

Account Receivable Review Compilation

Fazlan Muallif – St Fauziyah Nurul

Assurance Services

Assurance service is an independent

professional service, typically provided
by Charteredor Certified Public
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)

Fazlan Muallif – St Fauziyah Nurul

Assurance Engagement Defined

Assurance engagement mean an engagement in which a practitioner

(professional accountant or auditor), expresses a conclusion (in report
form) that is designed to enhance the degree of confidence users have
about the evaluation of a subject matter against identified criteria.

Fazlan Muallif – St Fauziyah Nurul

Five Element of Assurance Engagement

According to International Framework on Assurance Engagements, there

are five elements of any assurance engagement which are as follows:
1. A three party relationship involving
practitioner (auditor), a responsible part
Three Party (client) and intended users (users of financial
Relationship
statements)
2. Subject matter; against which assurance is
Expression on Subject required by the intended users
Opinion Matter
Element of 3. Suitable Criteria; which will be used by the
Assurance
Engagement practitioner to assess the subject matter, there
are relevance, completeness, reliability,
Neutrality, Understandability
Appropriate
Evidence
Suitable
Criteria
4. Gathering of sufficient appropriate evidence;
based on which practitioner will express his
opinion regarding subject matter
5. Expression of an opinion; which will be done
by the practitioner through written report

Fazlan Muallif – St Fauziyah Nurul

Reasonable and Limited Assurance

Fazlan Muallif – St Fauziyah Nurul

Reasonable Assurance

In a reasonable assurance engagement, the practitioner gathers sufficient

appropriate evidence to conclude that the subject matter conforms in all material
respects with identified suitable criteria, and gives a report in the form of a positive
assurance.

A positive assurance is given when the auditor gives a 'direct' opinion on the
financial statements. This is illustrated as follows:

“in our opinion internal control is effective, in all material respect based on XYZ
criteria”

The opinion above shows that the auditor is very confident about making his/her
statement simply because the evidence collected and the work done have been
extensive, covering all material areas of the financial statements.

Fazlan Muallif – St Fauziyah Nurul

Limited Assurance

In a limited assurance engagement, the practitioner gathers sufficient appropriate

evidence to conclude that the subject matter is plausible in the circumstances, and
gives a report in the form of a negative assurance.

The auditor then gives a negative assurance by providing an 'indirect' opinion on

the financial statements. This is illustrated as follows:

“Based on our works, described in this report nothing has come to our attention that
causes us to believe that internal control is not effective, in all material respect
based on XYZ criteria”

The opinion above shows that the auditor is less confident about making his/her
statement simply because the evidence collected and the work done have been
limited. The auditor is essentially giving an opinion based on what he/she was able
to find in the limited amount of testing and checking.

Fazlan Muallif – St Fauziyah Nurul

Non Assurance Enggagement Defined

A non-assurance engagement is an engagement that

doesn't impact on the level of confidence in the
validity of the financial statements. If an engagement
lacks the five elements of assurance engagements, it is
considered non-assurance (residual definition)

Fazlan Muallif – St Fauziyah Nurul

Audit, Review and Compilation

Audit, Review & Compilation: How CPA reports differ?

Many companies provide their financial statements, along with a CPA’s report,
to lenders, investors, suppliers and customers. Informed readers of the report
will gain varied levels of comfort based on the type of financial statement
provided. Not all reports are the same. A CPA can provide different levels of
service related to a company’s financial statements.

The three general levels of financial statement service are audit, review and
compilation. When do you need an audit? Businesses should work with their
external auditors to determine what their real needs are so they can decide the
right level of service. Is the need for the financial statement a debt covenant
requirement? Shareholder use? Regulatory requirement? Performance
measurement? Or perhaps compensation calculation?

Fazlan Muallif – St Fauziyah Nurul

Audit, Review and Compilation

Fazlan Muallif – St Fauziyah Nurul

Audit, Review and Compilation

Fazlan Muallif – St Fauziyah Nurul

End……..

Fazlan Muallif – St Fauziyah Nurul