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Chapter 21Chapter 21Assurance, Assurance,
Attestation, and Attestation, and Internal Auditing Internal Auditing
ServicesServices
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Assurance ServicesAssurance Services
Assurance services are independent
professional services that improve the
quality of information, or its context, for decision makers.
LO# 1
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LO# 1
Assurance ServicesAssurance Services
21-3
Types of Assurance ServicesTypes of Assurance Services
Risk Assessment
Business Performance Measurement
Information System
Reliability
Electronic Commerce
Health Care Performance
Measurement
PrimePlus
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Attest EngagementsAttest Engagements
Attest services occur when a practitioner is engaged to
issue, or does issue, an examination, a review, or an
agreed upon procedures report on subject matter, or an assertion about subject
matter, that is the responsibility of another
party.
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Attest EngagementsAttest EngagementsFigure 21-3
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Types of Attest Engagements Types of Attest Engagements
Attest Engagements
Examination
Review
Agreed-Upon
Procedures
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Attestation StandardsAttestation Standards
Attestation Standards
General Fieldwork Reporting
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Reporting on an Entity’s Internal Reporting on an Entity’s Internal Control over Financial ReportingControl over Financial ReportingThe Federal Deposit Insurance Corporation Improvement Act of 1991 requires that the
management of large financial institutions issue a report on the effectiveness of the institution’s
internal control and that they engage accountants to attest to management’s report.
The Sarbanes-Oxley Act of 2002 imposed similar requirements on all publicly held
companies.
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Financial ForecastsFinancial Forecastsand Projections and Projections
CPAs can be engaged to examine, apply agreed-upon procedures, or compile the prospective
financial statements if such statements are expected to be used by a third party.
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Accounting and Review ServicesAccounting and Review Services
Compilations Reviews
Many nonpublic companies do not choose to contract for an audit of their financial statements.
However, these entities often employ a CPA to assist with preparing their financial statements, tax
returns, or other financial documents.
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Internal AuditingInternal Auditing
Internal auditing is an independent, objective assurance and consulting activity designed to add value and
improve an organization’s operations.
It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate
and improve the effectiveness of risk management, control, and governance processes.
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Internal AuditorsInternal Auditors’’ Roles Roles
Evaluating Risks and Controls
Reviewing Compliance
Financial Auditing Operational Auditing
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Trust Services Trust Services
Security
Availability
Processing Integrity
Online Privacy
Confidentiality
Five Principles Five Principles of Trust of Trust ServicesServices
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End of Chapter 21End of Chapter 21
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