FUNDAMENTALS OF ASSURANCE AND NON-ASSURANCE ENGAGEMENTS is the information collected for review of a company's financial

transactions, internal control practices and other factors

necessary for the certification of financial statements
ASSURANCE ENGAGEMENTS a. Sufficiency is the measure of quantity of audit evidence
b. Appropriateness on the other hand is the measure of quality
• An assurance engagement is an independent professional service that of audit evidence
improves the quality and credibility of information to decision makers The practitioner plans and performs an assurance
Need for an independent financial statements audit engagement with an attitude of professional skepticism
• Written assurance report
1. Conflict interest between management and users of financial statements It is a written report provides by the practitioner containing conclusion
2. Expertise that conveys the assurance obtained about the subject matter
3. Remoteness information
4. Financial consequences

Elements of an assurance engagements (WATSS)

NON-ASSURANCE ENGAGEMENTS
• Three party relationship
a. Practitioner - Lacks one or more of the five elements of an assurance engagements
b. Responsible party - Example: 1. Related services, such as: Agreed-upon procedures
c. Intended users engagements, Compilations of financial or other information
engagements 2. Tax services (such as the preparation of tax
• Appropriate subject matter
returns where no conclusion conveying assurance is expressed) 3.
Identifiable and capable of consistent evaluation or
Consulting (or advisory) engagements, such as management and tax
measurement against the identified criteria and such that
consulting
information about it can be subjected to procedures for
gathering sufficient appropriate evidence
a. Financial performance or condition
b. Non financial performance or condition INTERNAL AUDITING
c. Physical characteristics - is an independent, objective assurance and consulting activity designed to add
d. Systems and processes value and improve an organization's operations. It helps an organization
e. Behavior accomplish its objectives by bringing a systematic, disciplined approach to
• Suitable criteria evaluate and improve the effectiveness of risk
Benchmarks used to evaluate the subject matter management, control and governance processes.
It is required for reasonably consistent evaluation or Some Key points of internal auditing
measurement of a subject matter within the context of
professional judgement a. It assists management to improve internal controls by identifying
a. Relevance weaknesses in systems and provides an opportunity to correct those
weaknesses
b. Completeness
c. Reliability b. Helping the organization accomplish its objectives: strategic, operations,
d. Neutrality reporting, compliance
e. Understandability c. It helps in evaluating and improving the effectiveness of Risk
• Sufficient appropriate evidence Management: governance, risk management, control
 d. Assurance and consulting activity: designed to add value and improve
operations
The assurance part includes informing managers and directors how the
systems and processes put in place by management are working.
Consultation then takes place on how to improve these systems and
processes where necessary
e. It is independent and objective
Some of the benefits of having a good system of internal controls are:
- Helping protect assets and reduce the possibility of fraud
- Improving efficiency in operations
- Increasing financial reliability and integrity
- Ensuring compliance with laws and statutory regulations
- Establishing monitoring procedures
THE INTERNAL AUDIT PROFESSION
❖ 1941: Establishment of The Institute of Internal Auditors with 24
members.
❖ 1948: The first chapters outside North America are formed in
London and Manila.
❖ 1968: The IIA Code of Ethics is approved.
❖ 1973: The Certified Internal Auditor (CIA) program is established.
❖ 1978: The Standards for the Professional Practice of Internal Auditing was
approved.
❖ 1989: The United Nations grants consultative status to The IIA.
❖ 1995: The IIA became an official member body of the American National
Standards Institute (ANSI) and the sole United States
representative to the International Standards Organization (ISO).
❖ 1998: A record-breaking of 5,165 candidates sitting for one or more parts of
CIA exam.
❖ 2000: The new Standards is introduced.
❖ 2002: The Standards became mandatory guidance for all IIA Members and
CIAs.
❖ 2006: IIA Membership exceeds 120,000.
❖ 2007: To continue to use the statement “conducted in
accordance with the International Standards for the Professional Practice of
Internal Auditing”, internal audit functions that existed as of January 1, 2002
must have an external quality assessment completed by January 1, 2007.
❖ 2008: Computer-based testing is introduced for all professional
examinations administered by The IIA.
THE NATURE AND SCOPE OF MODERN INTERNAL AUDIT SERVICES
❖ The targets of internal audit attention may include:
▪ Operational effectiveness and efficiency of business processes
▪ Reliability of information systems and the quality of the decision-making
information produced by those systems
▪ Safeguarding assets against loss, including losses resulting
from management and employee fraud
▪ Compliance with organizational policies, contracts, laws and regulations
❖ Governing bodies and senior management rely on Internal Auditing for
objective assurance and insight on the effectiveness
and efficiency of governance, risk management, and internal control
processes.
THE INSTITUTE OF INTERNAL AUDITORS
❖ The internal audit profession’s global voice, standard-setter, and resource
for professional development and certification.
PROFESSIONAL GUIDANCE
❖ International Professional Practices Framework is the conceptual
framework that organizes authoritative guidance promulgated by The
Institute of Internal Auditors.
❖ Conformance with the principles set forth in mandatory
guidance is required and essential for the professional practice of internal
auditing.
❖ Recommended Guidance describes practices for effective
implementation of The IIA’s Core Principles, Definition of Internal
Auditing, Code of Ethics and Standards.
▪ Implementation Guidance assists internal auditors in
applying the Standards.
▪ Supplemental Guidance provides detailed processes and
procedures for internal audit practitioners.
▪
PROFESSIONAL CERTIFICATIONS
❖ CERTIFIED INTERNAL AUDITOR (CIA)
▪ As the only recognized internal audit certification, becoming a
Certified Internal Auditor (CIA) is the optimum
way to communicate knowledge, skills, and competencies to
effectively carry out professional responsibilities for any audit,
anywhere.
▪ According to The IIA’s 2017 Internal Audit Compensation
 Study, CIAs earn an average of $38,000 more annually than those
without a certification. Among Canadian respondents, auditors
performing fraud/forensic audits were found to have the highest
median salary, while in the U.S., auditors specializing in IT were the
top earners.
▪ Ultimately, becoming certified will:
o Help you earn credibility and respect in your field.
o Open more opportunities for advancement.
o Increase your earning potential by as much as 51%.
o Prove your willingness to invest in your own development.
o Demonstrate your commitment to your profession.
o Improve your internal audit skills and knowledge.
o Build confidence in your knowledge of the profession.
❖ SPECIALTY CERTIFICATION PROGRAMS:
▪ Certification in Control Self-Assessment (CCSA)
▪ Certified Government Auditing Professional (CGAP)
▪ Certified Financial Services Auditor (CFSA)
▪ Certification in Risk Management Assurance (CRMA)
INFORMATION SYSTEMS AUDIT AND CONTROL ASSOCIATION (ISACA) sponsors
programs for:
▪ Certified Information Systems Auditor (CISA)
▪ Certified in Risk and Information Systems Control (CRISC)
▪ Certified Information Security Manager (CISM)
▪ Certified in the Governance of Enterprise IT (CGEIT)
❖ INTERNATION COUNCIL OF ELECTRONIC COMMERCE
CONSULTANTS (EC-Council ) sponsors the Certified Ethical Hacker (CEH) program
❖ ASSOCIATION OF CERTIFIED FRAUD EXAMINERS (ACFE)
sponsors the Certified Fraud Examiner (CFE) program.
INHERENT PERSONAL QUALITIES
❖ Integrity
❖ Passion
❖ Work ethic
❖ Curiosity
❖ Creativity
❖ Initiative
❖ Flexibility