Discuss the differences between the attest function and assurance services
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An attest service, or attestation service, is an independent review of a company's financial statement conducted by a certified public accountant (CPA). The CPA delivers an attestation report with conclusions about the reliability of the data. Show
The standards for attestation services are developed and published by a professional services group, the American Institute of Certified Public Accountants (AICPA). In recent years, the standards have been updated to reflect a wider range of attest services unrelated to financial reports. For instance, a company might request an attest service on its consumer privacy statement. Understanding the Attest ServiceIn law, an attestation is a declaration by a witness that a legal document was properly signed in the presence of the witness. Essentially, it confirms that a document is valid. A notary public provides an attestation for documents. In finance, an attestation service is a CPA's declaration that the numbers are accurate and reliable. As the service is completed by an independent party, it validates the financial information prepared by internal accountants. There are three main types of attest functions including a comprehensive examination, a review of an examination completed by another party, and a partial examination that is limited to an analysis of specific procedures. Key Takeaways
All three attest functions must follow standards set by the AICPA with respect to audit procedure, independence, and expression of opinion. CPAs increasingly are asked to perform attest services on non-financial documents such as security and privacy control statements. Both audit and assurance services play a key role during the evaluation of a company’s financial record. These procedures are followed to verify the accounting record available with a company. This helps to ascertain whether the record is accurate or not. Furthermore, audit and assurance ensure that all the record is kept in line with the prevailing accounting standards. However, there is a difference between audit and assurance services.So without any further ado, let’s chalk out the key differences between assurance and audit services. Audit ServicesDuring an audit, all the accounting entries available in the company’s financial statement are thoroughly evaluated. The audit team tries to judge the accuracy of a financial report by taking into account its key aspects. These include:
This process helps to point out any false entry in financial records such as fraud, misuse of funds, or fraudulent activity. Both external and internal auditors perform the audit. Internal auditors are the employees of a company, who conduct an internal audit. On the contrary, external auditors are independent auditors, who are not part of a company being audited. Check out this blog post on that highlights the major differences between internal and external auditors. The audit department of a company performs an internal audit after regular intervals. This helps to verify the financial report and keep it in line with the accounting standards. Nevertheless, a company is bound to hire external auditors to seek an unbiased audit report. Assurance ServicesAfter discussing the audit, let’s take a look at assurance services. It involves the procedure of assessment regarding the financial records and accounting entries. Assurance services are provided by independent professionals, which help to improve the quality of information for the decision-makers. For instance, assurance services can review any financial transaction or document i.e loan, contract. This certifies the validity, authenticity, and correctness of the document being reviewed. Furthermore, assurance services can assist companies to overcome the complexities and risks associated with third-party relationships. Assurance is a way to enhance the relevance, value, and transparency of information held by a company. The major difference between assurance and audit services relates to the key purpose. Assurance is not meant to correct the issues found in the accounting records. On the contrary, the true purpose of this procedure is to measure the compliance of a company in terms of following the accounting standards and principles. Assurance relies on key aspects like assessment of the procedures followed during financial operations of a company. Hence, the assurance team closely monitors the operations and procedures. The assurance explains that a specified procedure needs to be followed for gaining maximum outputs. Below are the five elements of assurance engagement:
The basic aim of assurance is to verify whether the financial reports of a company are accurate. This process helps to assure that no fraudulent activities are done by/in the company. It also rules out the chance of any misrepresentation regarding the financial records of a company. Furthermore, assurance is a way to observe and analyze the process, procedure, and operations. It ensures to improve the quality of information available with a company. Hence, stakeholders can make impressive decisions for the better growth of a company. This process also works well in a wide range of areas including customer feedback, employee feedback, and financial information. Salient Differences between Audit and AssuranceThe notable differences between audit and assurance are as follows:
Comparison TableAuditAssuranceIt involves evaluation of the accounting information available in financial statements.Assurance is a way to analyze and assess the procedures, operations, and processes. The basic aim is to present fair and accurate financial information that also follows accounting principles and standards.It ensures that the presented accounting information is accurate. Meaning thereby, there are no misrepresentations or irregularity in such a report.The audit is performed under international auditing standards.The practitioner may restrict to a specific area due to the assurance terms.All stakeholders of a company are engaged Assurance may restrict to one type of stakeholder Resources and time necessary for conducting an audit are relatively higherResources and time required for assurance are relatively lowerAudit points out any dishonest activity or misuse of the funds in financial statements Assurance is done after the audit and provides essential information for better decision making.Final WordsIn this article, we have tried to draw out a clear difference between audit and assurance services. Although these processes are different from each other, yet they are closely linked. Hence, they are equally important in evaluating the performance and financial records of a company. Audit and assurance identify any misrepresentation or fraudulent activities in the accounting records. In addition, these processes provide essential information to the stakeholders, which is essential for making better decisions.
If you are searching for highly professional yet affordable auditing and assurance services in Malaysia, you can consult us anytime. We are one of the best audit firms in Malaysia especially when it comes to auditing, assurance, and consultancy services. What is the major difference between auditing services and assurance services?The audit is the review of the accounts or documents, while the assurance is the process analysis of those accounts or records. Once analyzed, the organization can make changes as needed and be "assured" they have accurate financials and processes in place.
What is the relationship between audit services attestation services and assurance services?Relationship between audit, attestation, and assurance services: CPA in the U.S usually perform these all these three kinds of services. All these services require CPA to review financial information, thereafter he gives his opinion, attests, and provides assurance based on his findings.
What is an attest function?An attest function is a CPA's review of a company's financial statement. After a comprehensive review, a CPA delivers an opinion on the integrity of the numbers in the statement. A company may also seek a review or a partial examination.
What is the difference between audit and attest services?Auditors evaluate subject matter or an assertion in accordance with specific criteria. Attest engagements include assurance and non-assurance services. Most importantly, attest services are a set of protected services that only licensed certified public accountants (CPA) who operate within a CPA firm can perform.
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