Assurance Service Engagement

An assurance service engagement is an engagement in which a practitioner expresses a conclusion about the reliability of an assertion that is the responsibility of another party. Assurance engagements may be performed on a variety of subject matter, including financial statements, performance information, and compliance with laws and regulations.

Assurance engagements are performed by practitioners who are independent of the responsible party. This independence is essential to ensure that the practitioner can provide an objective opinion.

Attest Engagement

An attest engagement is a type of assurance engagement in which the practitioner expresses a conclusion about the reliability of an assertion that is the responsibility of another party, based on an examination of the subject matter.

Attest engagements are performed under the standards of the American Institute of Certified Public Accountants (AICPA). The AICPA’s Statement on Standards for Attestation Engagements (SSAE) provides guidance on how to perform and report on attest engagements.

Is an Audit Engagement an Attest Engagement?

Yes, an audit engagement is an attest engagement. An audit is a type of assurance engagement in which the practitioner expresses a reasonable assurance opinion about whether the financial statements are free from material misstatement, in accordance with generally accepted accounting principles (GAAP).

Other Attest Services

In addition to audits, there are a number of other attest services that practitioners can perform. These services include:

• Reviews of financial statements: A review provides limited assurance that the financial statements are free from material misstatement.
• Examinations of internal control over financial reporting: This service provides a reasonable assurance opinion about whether the entity’s internal control over financial reporting is effective.
• Examinations of compliance with contracts or regulations: This service provides a reasonable assurance opinion about whether the entity has complied with specified contracts or regulations.
• Examinations of performance information: This service provides a reasonable assurance opinion about the reliability of performance information, such as key performance indicators (KPIs).

Examples of Assurance Service Engagements

The following are some examples of assurance service engagements:

• An audit of a company’s financial statements
• A review of a nonprofit organization’s financial statements
• An examination of a company’s internal control over financial reporting
• An examination of a company’s compliance with a contract with a customer
• An examination of a company’s performance information, such as its revenue and profitability

Importance of Assurance Service Engagements

Assurance service engagements are important because they provide users of information with confidence in the reliability of that information. This confidence is especially important when the information is being used to make important decisions, such as whether to invest in a company or to lend money to a company.

Conclusion

Assurance service engagements are an important part of the accounting profession. By providing assurance on the reliability of information, assurance service engagements help to promote confidence in the financial markets and in the economy as a whole.