Information about Assurance Services
Assurance services have been defined by the American Institute of Certified Public Accountants (AICPA) as 'Independent Professional Services that improve information quality or its context'. ' Assurance services reduce the information risk; risk that the information provided is incorrect, on more than just financial data. The major purpose of assurance services is to provide independent and professional opinions that improve the quality of information to management as well as other decision makers within a given firm.
Audits actually can be considered a type of assurance service. However audits are only designed to test the validity of the financial statements and that only. Under an assurance engagement CPA's can provide a variety of services ranging from information systems security reviews to customer satisfaction surveys. Assurance services unlike audit and attestation services, that are often highly structured, assurance services tend to be customized and implemented when it is a smaller group of decision makers within the firm. Often times managers must make decisions on things they have incomplete or inaccurate data for, decisions made on this data can lead to incorrect decisions and increases the overall business risk. In this respect assurance services can be very helpful in reducing this risk and help mangers or decision makers make more confident decisions that can lead to more confident decisions within a given firm. This is similar to audits in that investors will choose to invest in a firm that is publishing financial statements that have not been audited by an independent CPA firm.
Assurance services can test financial and non-financial information; due to this assurance services can be classified as consulting services. However, assurance services are not considered consulting because consulting services are when a CPA (Certified Public Accountant) uses his professional knowledge to make recommendations for a future event or a procedure, such as the design of an information system or accounting control system. Contrast assurance services are designed to test the validity of past data of the business cycles. Although there is no boundary to what a CPA can test in assurance services, a CPA will not likely accept an assurance engagement in which his firm or previous experiences does not provide them with enough expertise to make a professional opinion on the given data.
Other examples of assurance services include:
Outsourcing became part of the business lexicon during the 1980s and refers to the delegation of non-core operations from internal production to an external
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Audits actually can be considered a type of assurance service. However audits are only designed to test the validity of the financial statements and that only. Under an assurance engagement CPA's can provide a variety of services ranging from information systems security reviews to customer satisfaction surveys. Assurance services unlike audit and attestation services, that are often highly structured, assurance services tend to be customized and implemented when it is a smaller group of decision makers within the firm. Often times managers must make decisions on things they have incomplete or inaccurate data for, decisions made on this data can lead to incorrect decisions and increases the overall business risk. In this respect assurance services can be very helpful in reducing this risk and help mangers or decision makers make more confident decisions that can lead to more confident decisions within a given firm. This is similar to audits in that investors will choose to invest in a firm that is publishing financial statements that have not been audited by an independent CPA firm.
Assurance services can test financial and non-financial information; due to this assurance services can be classified as consulting services. However, assurance services are not considered consulting because consulting services are when a CPA (Certified Public Accountant) uses his professional knowledge to make recommendations for a future event or a procedure, such as the design of an information system or accounting control system. Contrast assurance services are designed to test the validity of past data of the business cycles. Although there is no boundary to what a CPA can test in assurance services, a CPA will not likely accept an assurance engagement in which his firm or previous experiences does not provide them with enough expertise to make a professional opinion on the given data.
Other examples of assurance services include:
- Business risk assessment
- Information systems security review
- Customer satisfaction survey
- Internal audit outsourcing
- Accounts receivable review
References
With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America.
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Risk assessment is a step in the risk management process. Risk assessment is measuring two quantities of the risk R, the magnitude of the potential loss L, and the probability p that the loss will occur.
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Information security means protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction.[1] The terms information security
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Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard.
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Internal auditing is a profession and activity involved in advising organizations regarding how to better achieve their objectives. Internal auditing involves the utilization of a systematic methodology for analyzing business processes or organizational problems and recommending
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worldwide view of the subject.
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Outsourcing became part of the business lexicon during the 1980s and refers to the delegation of non-core operations from internal production to an external
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Accounts receivable is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer.
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