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Introduction
Demand is growing for independent assurance concerning a variety of subject matters in addition to historical financial statements. Practitioners both in the private and public sectors are now asked to provide assurance concerning matters such as compliance with contractual obligations or legislative authorities, the adequacy or effectiveness of control systems, the reliability of future-oriented financial information, and the economy, efficiency and effectiveness of operations. Examples of matters concerning which assurance might more frequently be provided in the future include performance measures, the soundness of business practices, the Management Discussion and Analysis included in an annual report or control systems relating to environmental matters. Assurance may be conveyed either through a direct report on a subject matter or an attest report on a written assertion prepared by an accountable party.
The profession does not have comprehensive standards broad enough to address the demand for expanded assurance services. The auditing and related services recommendations in the CICA Handbook ("Handbook") focus primarily on audits and reviews of financial statements. Standards and guidance relating to matters other than financial statements have been developed on an ad hoc basis to respond to specific needs. Examples of such pronouncements include SPECIAL REPORTS, Section 5800; OPINIONS ON CONTROL PROCEDURES AT A SERVICE ORGANIZATION, Section 5900; and SPECIAL REPORTS ON REGULATED FINANCIAL INSTITUTIONS, Auditing and Related Services Guideline AuG-13. In addition, standards and guidance have been developed for public sector mandates in the Public Sector Accounting and Auditing Handbook, including VALUE-FOR-MONEY AUDITING, Section PS 5400 and AUDITING FOR COMPLIANCE WITH LEGISLATIVE AND RELATED AUTHORITIES, Section PS 5300.
Like the Recommendations in Section 5100 of the Handbook, the proposed assurance standards deal with due care and objectivity, proficiency in carrying out the engagement, adequate planning and supervision, sufficient appropriate evidence and appropriate reporting; however, the proposed standards are broader in scope because they envision a wider array of subject matters.
Applicability of the Proposed Assurance Standards
The proposed standards describe the concepts underlying assurance engagements. The standards are intended to encompass current practice and provide a framework for the expansion of practice. The overall structure would look like the exhibit below. (exhibit omitted)
The Public Sector Accounting and Auditing Board intends to issue these standards as Section PS 5100 of the Public...