Dimal, Neil Laurrence A.

MA-335

Assignment Overview
For each module, you are required to submit a journal of the lesson, within the week of
discussion. This must be completed before the end of the module.

The following are the Journal Questions for this module:

1. What is “Assurance”? Explain the value we obtain from lay man’s assurance.
- The approach of reviewing and verifying accounting entries and financial
documentation is known as assurance. It ensures that the technique for
recording a company's records adheres to accounting principles and standards.
The basic purpose of assurance is to assure the accuracy of financial reports. It
also assures all parties that no financial records have been manipulated, no
public monies have been misused, no dishonesty has occurred, and no unethical
behavior has occurred within or by the organization.
2. What is an Assurance Engagement?
3. - An assurance engagement is a type of project that a practitioner undertakes. It
involves the practitioner conveying his or her point of view on a certain subject.
The content of the topic is analyzed using relevant criteria by practitioners.
During this process, they gather adequate and accurate evidence. They then
express their feelings on what they've observed.
4. Why do we conduct Assurance Engagements? Why is it an essential function in
the practice of our profession?
5. - The major purpose of an assurance engagement is to permit professional and
independent audit firms to carry out their responsibilities and express their
opinions based on the level of assurance they provide.
6. Differentiate the following: Reasonable Assurance Engagement and Limited
Assurance Engagement
7. - Assurance engagements can be divided into two categories. The first is
reasonable assurance, which is concerned with auditing or, in other texts,
scrutiny. It gathers evidence to provide a positive sort of assurance. The second
type is restricted assurance, which is concerned with review. It is a sort of
negative assurance. It indicates that the auditor doesn't say if it's presented fairly
or not. In comparison to an audit, the scope of procedures to be completed is
smaller.
8. Assertion-based Engagements and Direct Reporting Engagements
9. - There are two categories of assurance in which the auditor is unable to give
service. This type of assurance is based on the actual subject information's
availability. First, in assertion-based engagements, if the person in charge
provides subject at hand measurement, it is transmitted to the designated users
 in the form of assertions, and the practitioner is asked to affirm the accountable
party's statements. The practitioner discusses his feelings about the fairness of
remarks. Second, there is no subject matter information or statement provided by
the responsible party in direct reporting engagements. Though management
does not have an assertion, the professional accountant will supply one.
10. What are the Elements of an Assurance Engagement? Give an explanation and
include why such an element is necessary in the completion of such
engagement.
- - Assurance engagements consist of five components. Relationship between
three parties, adequate subject matter, proper criteria, sufficient appropriate
proof, and written assurance report First, the three-party connection involves a
practitioner who will do the engagement, but they can also utilize an expert if they
need to assess the salvage value, in which case an expert or an engineer would
be required. The party responsible is the person or entity in charge of the subject
matter or information. The subject matter information and the assurance report
will be used by the intended users. They could be investors, creditors, vendors,
or customers. Second, appropriate subject matter can be financial or non-
financial performance, physical characteristics, system and processes, or
behavior. There are a lot of subject matter, but it can be appropriate if it is
identifiable and capable of measurements against criteria. Third, appropriate
criteria standards are utilized to evaluate the subject content and are made
available to the intended consumers. It can be formal, such as Philippine
Financial Reporting Standards for financial statements, or informal, such as
Internal Control Integrated Framework. You can also compare it to laws and
regulations to see if the information is compliant or not. These are established
criteria that are recognized globally or nationally. These are particularly
established criteria that are made by an entity for less formal reasons such as
internally produced code, rules & regulations, and policies.
11. What are Non-assurance services? Give examples and explain.
Non-assurance services include management consulting, accounting, and
bookkeeping, tax services, and certain management consulting, which can also
be categorized as assurance services. According to the author, “the primary
purpose of a management consulting engagement is to offer a recommendation
to management. Accountants are charged with assessing a client's tax liability,
undertaking tax planning, and assisting in the preparation of tax returns because
to the complicated nature of tax rules and their frequent change.
References:

Fazal, H.(n.d.). What is the difference between Attestation engagement and Direct
reporting engagement in auditing?. https://pakaccountants.com/difference-attestation-
engagement-direct-reporting-engagement-auditing/#comment-28826

Arens, A., Beasley, M., Elder, R. (2014).

Auditing and Assurance Services: An Integrated Approach. (15ed.) Prentice Hall.

Vaidya, D.(2021). Audit vs Assurance. https://www.wallstreetmojo.com/audit-vs-

assurance/

ICAEW. (2021). The Institute of Chartered Accountants in England and Wales.

https://www.icaew.com/technical/audit-and-assurance/assurance/process/reporting