Download comercial law vcytsyut rtdeu6rf6uyr rsy5er8i7troi 5tred6turfduy6t6dt6ude ted6ure5y7tsd5yt and more Lab Reports Commercial Law in PDF only on Docsity!
AUDITING AND ASSURANCE:
Specialized Industries
Auditing
A systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users.
Assurance
An engagement whereby a practitioner expresses a conclusion that enhances the
degree of confidence of the users on a subject matter prepared by a “responsible
party” when the subject matter is compared and measured against established criteria.
Level of Assurance
Reasonable Assurance (Audit)
● Are aimed at “Reducing Engagement Risk” to an acceptably low level in the light of the given circumstance. A positive expression is thereby included in a practitioner’s report.
Limited Assurance (Review)
● Also aimed at “Reducing Engagement Risk” to an acceptable level, but that, there is a higher engagement risk that that when a reasonable assurance is promised, since less extensive procedure are performed by the practitioner
Elements of Assurance Engagement
➢ Three Party Relationship
➢ Subject Matter
➢ Suitable Criteria
➢ Sufficient Appropriate Evidence
➢ Written Report
What is specialized industry?
A specialized industry is a distinct market that has a unique way of accounting for transactions and reporting its financial results. These differences are allowed under the applicable accounting framework, such as IFRS or GAAP. Examples of specialized industries are airlines, banking, and insurance.
Specialized Industries
Examples of specialized industries are airlines companies, insurance companies,
banking and financial institutions, real estate, business process outsourcing (BPO)
entities, construction on contracting companies, health maintenance organizations (HMO), holding entities, logging and mining entities.
What makes these industries specialized?
● Is that they are likely either to have specific financial reporting standards applicable to them, or to have distinct accounting policies which have been developed to account for specialized transactions and balances which are based on the normally-applied financial reporting standards.
For instance, IAS 41, Agriculture is clearly relevant specifically to the agriculture sector and IFRS 7, Financial Instruments: Disclosures will need specific application by companies operating in banking sector.
