Example Service Organization’s Statements

 


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What is the management`s expert and how does the auditor use the management`s expert work?

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  The preparation of a company’s financial statements may require ability in a field other than accounting or auditing . In such situations the company may employ or engage experts in these fields to obtain the necessary expertise for preparing of the financial statements . Management’s expert is an individual or organization possessing special experience and knowledge in a field other than accounting or auditing, whose work in that field is used by the company to assist in the preparation of the financial statements. The management`s expert expertise may be needed in the following fields: ·       The valuation of complex financial instruments , land and buildings, plant and machinery, jewelry, works of art, antiques, intangible assets , assets acquired, and liabilities assumed in business combinations and assets that may have been impaired. ·         The actuarial calculation of liabilities associated with insuran...
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Why do auditors use assertions?

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  Assertions are representations by management that are embodied in the financial statements and used by the auditor to consider the different types of potential misstatements that may occur. Assertions may fall into the following categories: Assertions about classes of transactions and events, and related disclosures, for the period under audit : ·         Occurrence —transactions and events that have been recorded or disclosed have occurred, and such transactions and events are related to the company. ·         Completeness —all transactions and events that should have been recorded have been recorded, and all related disclosures that should have been included in the financial statements have been included.   ·         Accuracy —amounts and other data relating to recorded transactions and events have been recorded appropriately, and related disclosures have been a...
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