Chapter 14 - Other assurance services. After studying this chapter you should be able to: explain the different levels of government in Australia and their main responsibilities; explain the concept of accountability; outline the different bases of accounting used in the public sector; explain public sector audit requirements; describe the nature of performance auditing; and describe the nature of regularity audits. | CHAPTER 14 OTHER ASSURANCE SERVICES A REVIEW OF LEVELS OF ASSURANCE Form of engagement Level of assurance Expression of opinion audit high positive review moderate negative agreed upon procedures nil report of factual findings REVIEW ENGAGEMENTS Used when moderate rather than high level of assurance deemed appropriate Report provides negative assurance of whether anything has come to auditor’s attention that causes auditor to believe subject matter not fairly presented EVIDENCE COLLECTION PROCEDURES FOR REVIEWS In planning for a review engagement, knowledge of entity is vital. Major evidence collection procedures: Inquiries of management Analytical procedures REPORTING OF REVIEW RESULTS Important that client and user understand that a review is being undertaken, not an audit: Engagement letter and discussion with client must ensure that differences between review and audit are understood Review report must clearly show that lower level of assurance than with an audit is provided EXAMPLE OF AN UNQUALIFIED REVIEW REPORT AGREED-UPON PROCEDURES Such procedures are broad-ranging and can be in any area where the client and user perceive them to be beneficial. For example: Accounts payable listing is complete and accurate Academy Awards votes confidentially maintained and properly counted IMPORTANCE OF UNDERSTANDING WHAT IS AGREED UPON Engagement letter should clearly set out: Nature of engagement, and the fact that procedures performed are not an audit or review List of procedures to be performed as agreed Anticipated form of report Restrictions on distribution of report ASSURANCE SERVICES ON FINANCIAL INFORMATION OTHER THAN GENERAL PURPOSE REPORTS Special purpose reports Components of financial reports Summarised financial reports Due diligence engagements ASSURANCE SERVICES REQUIRED BY SPECIFIC LEGISLATION OR REGULATIONS Future-oriented (prospective) financial information Internal controls, . superannuation reporting obligations . | CHAPTER 14 OTHER ASSURANCE SERVICES A REVIEW OF LEVELS OF ASSURANCE Form of engagement Level of assurance Expression of opinion audit high positive review moderate negative agreed upon procedures nil report of factual findings REVIEW ENGAGEMENTS Used when moderate rather than high level of assurance deemed appropriate Report provides negative assurance of whether anything has come to auditor’s attention that causes auditor to believe subject matter not fairly presented EVIDENCE COLLECTION PROCEDURES FOR REVIEWS In planning for a review engagement, knowledge of entity is vital. Major evidence collection procedures: Inquiries of management Analytical procedures REPORTING OF REVIEW RESULTS Important that client and user understand that a review is being undertaken, not an audit: Engagement letter and discussion with client must ensure that differences between review and audit are understood Review report must clearly show that lower level of assurance than with an audit .
