Direct Reporting Engagement
Is an engagement where management does not
make a written assertion about the effectiveness
of their internal control and the auditor provides
an opinion, such as the effectiveness of the
control procedures, about the subject matter
directly.
Attestation Engagement
Under attestation engagement, an evaluation of
subject matter (i.e. FS) would have already been
conducted by the responsible party
(management) against a set criteria (PPSAS). As
this evaluation is usually given in the form of a
report issued to the intended users by the
responsible party. This report is actually a claim
by the responsible party of a fair evaluation of
subject matter. On that assertion made by the
responsible party, the auditor is asked to confirm
whether such assertion of evaluation is fair or
not. An engagement to attest the assertions of
responsible party is called attestation
engagement. And at the conclusion of attest
engagement, the auditor will issue a report in
which he may word his opinion as follows:
Example 1:
In our opinion, the responsible party’s assertion
that forecasts has been prepared on best
estimate basis, is fair.
Example 2:
In our opinion, the responsible party’s assertion
that internal controls are working effectively, is
fair