Immersing in audit

  Control activities is one of the elements of the system of internal control . Components of the Company’s System of Internal Control Control activities are the actions established through policies and procedures that help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out. These objectives relate to reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations. Controls in the control activities component may relate to the following: Authorization and approvals.   An authorization affirms that a transaction is valid.   An authorization typically takes the form of an approval by a higher level of management or of verification and a determination if the transaction is valid. For example, a supervisor approves an expense report after reviewing whether the expenses seem reasonable and within policy. Reconciliations.  Reconciliations compar...

  Assurance engagement to report on compilation of pro forma financial information and compilation engagement. Services provided by audit companies could be divided into two groups - assurance engagements and non-assurance engagements.

  Services provided by audit companies could be divided into two groups - assurance engagements and non-assurance engagements . The first group of “assurance engagements” includes audit engagements, review engagements of historical financial statements and interim information, and other assurance engagements. The second group of services “non-assurance engagements” comprises of related services engagements and other services. Audit engagement - The purpose of an audit is to enhance the degree of confidence of intended users in the financial statements. This is achieved by obtaining reasonable assurance about whether the financial statements as a whole are free from material misstatement and express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework. Review engagements of historical financial statements and interim information are  limited assurance engagements . The practiti...

   Compilation report is needed to communicate the nature of the compilation engagement, and the practitioner’s role and responsibilities in the engagement. It does not contain either an opinion or conclusion on financial statements because under the compilation engagement a practitioner applies accounting and financial reporting expertise to assist management in the preparation and presentation of financial information of an entity in accordance with an applicable financial reporting framework.