What is assurance engagement?
Assurance engagement is an engagement performed by a practitioner to enable himself to express an opinion about the measurement of subject matter against a criteria. Practitioner’s expression of opinion raise the confidence of the users over the measurement as to whether measurement of subject matter is a fair statement keeping the criteria applicable under consideration. Replacing the formal […]
What is an Assurance engagement in auditing?
Assurance engagement is an engagement performed by a practitioner to enable himself to express an opinion about the measurement of subject matter against a criteria. Practitioner’s expression of opinion raise the confidence of the users over the measurement of subject matter subject to the criteria applicable under consideration. To summarize the above formal definition, read through the […]
What is the difference between Attestation engagement and Direct reporting engagement in auditing?
Before we discuss the difference between attestation engagement and direct reporting engagement, lets understand what is assurance engagement at first place. Assurance engagement is simply an engagement conducted by a practitioner at the end of which he expresses his opinion on the measurement of subject matter against a criteria. This opinion will ultimately enhance the degree of […]
What is the difference between Objective of audit and Purpose of audit
Although the terms objective and purpose are mostly used to mean the same and are used interchangeably but under International Auditing Standards (ISAs) the purpose of audit and objective of audit is NOT the same thing. Under ISAs the term purpose of audit simply means why audit is conducted. Whereas objective of audit means what […]
What is Detection risk?
According to International Auditing Standards detection risk is defined as follows: The risk that the procedures performed by the auditor to reduce audit risk to an acceptably low level will not detect a misstatement that exists and that could be material, either individually or when aggregated with other misstatements. In simple words detection risk is […]
What is Control risk?
Control risk has been defined under International Standards of Auditing (ISAs) as following: The risk that a misstatement that could occur in an assertion about a class of transaction, account balance or disclosure and that could be material, either individually or when aggregated with other misstatements, will not be prevented, or detected and corrected, on […]
How Professional judgement and Professional skepticism are different in application?
Professional Skepticism and Professional Judgment both are required to conduct the assurance engagements properly. But both are two separate requirements and are not one and the same and are different in their meaning and also in their application. But surely both complement each other in auditor’s work. Professional Skepticism The auditor is required to maintain […]
What is the difference between Due Care and Due Diligence in auditing?
In IESBA Code of Ethics for Professional accountants, one of the fundamental principles is the principle of Professional competence and due care. Practitioner (auditor) is required to conduct assurance engagement with due care which ultimately requires auditor to act diligently. Due care simply refers to the degree of care which is expected from a reasonable […]
What is Directional testing?
Auditor gathers sufficient appropriate audit evidence to reduce audit to an acceptably low level and also the same audit evidence enables the auditor to reach reasonable conclusions which form the basis of auditor’s opinion. Now to gather sufficient appropriate audit evidence, auditor has to select the appropriate audit approach or audit methodology that promises the […]
What is the difference between Audit Procedure and Audit Methodology?
First of all lets agree on the point that auditor is required to obtain sufficient appropriate audit evidence to form reasonable conclusions and on the same conclusions auditor base his opinion. If we are clear on this part than we are half way through. The next question is how auditor is going to obtain sufficient […]
