Cga Assignment Au1
Mona and Michael’s friend is right, public accountants provide three different types of assurance services. These are audit, review, and compilation services; here is a summary of these engagements:
Audit engagements provide a high level of assurance that financial statements present fairly in all material respects the financial position and results of operations of the company.
Review engagements provide a moderate level of assurance that financial statements are in accordance with appropriate criteria, in all material respects. (paragraph 8100.05 of the CICA Handbook)
A compilation engagement is referred to as a related service and is not an assurance engagement. This is …show more content…
There is an inverse relationship between audit risk and materiality considerations. For example, the risk that relevant assertions related to a particular account balance, class of transactions, or disclosure could be misstated by an extremely large amount might be very low, but the risk that it could be misstated by an extremely small amount might be very high.
Holding other considerations equal, a decrease in the level of materiality that the auditor judges to be appropriate in the balance, class, or disclosure would require the auditor to do one or more of the following: (a) perform more effective audit procedures, (b) perform audit procedures closer to year end, or (c) increase the extent of particular audit procedures.
In determining the nature, timing, and extent of audit procedures to be applied to a speciﬁc account balance, class of transactions, or disclosure, the auditor should design audit procedures to obtain reasonable assurance of detecting misstatements. If the auditor decreases the amount of error considered material, the result will be an increase in the assessed level