Audit engagement is an attest or attestation engagement rather than direct reporting engagement. As the purpose of audit engagement is to enhance the degree of users of financial statements which is achieved by the expression of opinion by the auditor. This opinion given by the auditor is merely about the fairness of the financial statements i.e. whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework.
In simple words, auditor’s responsibility is to tell whether the financial statements prepared by the management of the entity are fair or not which auditor determines by using financial reporting framework as a criteria. By fairness of financial statements means whether the recognition, measurement, presentation of elements of financial statements and disclosures made are as per directions set out under applicable financial reporting framework.
Remember, it is management who is responsible for the preparation of financial statements i.e. it is management’s duty to ensure whether the recognition, measurement, presentation and disclosure criteria is being met or not and by publishing financial statement it is implied that management is claiming or asserting that financial statements are prepared in accordance with financial reporting framework. Only this assertion of management is attested by the auditor rather then giving own evaluation to the users of financial statements.
And according to IAASB’s International Framework for Assurance Engagement, engagement in which subject matter evaluation is made available to the users by the responsible party (management) in the form of assertion and practitioner (auditor) is asked to attest the evaluation by expressing his opinion so that confidence of users (other than responsible party) is reinforced over the evaluation given by the responsible party.
Thus audit is an attestation engagement.