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The Demand for Audit and Other Assurance Services

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Presentasi berjudul: "The Demand for Audit and Other Assurance Services"— Transcript presentasi:

1 The Demand for Audit and Other Assurance Services
Chapter 1

2 Auditing

3 Sarbanes-Oxley Act Enron WorldCom
The Act established the Public Company Accounting Oversight Board. It also requires auditors to report on the effectiveness of internal control over financial reporting. Tyco Adelphia

4 Nature of Auditing Auditing is the accumulation and evaluation
of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent person.

5 Information and Established Criteria
To do an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information. FASB IASB Criteria

6 Accumulating Evidence and Evaluating Evidence
Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. Transaction data Written and electronic Communications with outsiders Observations Client inquiry

7 Competent, Independent Person
Competence Judgment and Experience Independence Evaluation of Evidence The Auditor must be qualified to understand the criteria used and must be competent to know the types and amount of evidence to accumulate to reach the proper conclusion after the evidence has been examined. The competence of the individual performing the audit is of little value if he or she is biased in the accumulation and evaluation of evidence. Proper Conclusion

8 Audit of a Tax Return Example

9 Auditing Vs Accounting

10 Distinguish Between Auditing and Accounting
Accounting is the recording, classifying, and summarizing of economic events for the purpose of providing financial information used in decision making. Auditing is determining whether recorded information properly reflects the economic events that occurred during the accounting period.

11 Auditing and Reducing Information Risk

12 Economic Demand for Auditing
Demand Driver Information risk Auditing can have a significant effect on information risk. Information risk reflects the possibility that the information upon which the business risk decision was made was inaccurate. What is meant by “Information risk”?

13 Causes of Information Risk
Remoteness of information Biases and motives of the provider Voluminous data It is nearly impossible for a decision maker to have much firsthand knowledge about the organization with which they do business. Information from others must be relied upon. If information is provided by someone whose goals are inconsistent with those of the decision maker, the information may be biased in favor of the provider. The higher the volume of transactions, the greater the risk that improperly recorded information is included in the records. Exchange transactions between organizations have become increasingly complex and therefore more difficult to record properly. Complex exchange transactions

14 Reducing Information Risk
User verifies information User shares information risk with management Audited financial statements are provided The user may go to the business premises to examine records and obtain information about the reliability of the statements. There is considerable legal precedent that management is responsible for providing reliable information to users.

15 Relationships Among Auditors, Client, and External Users
Client or audit committee hires auditor Auditor issues report relied upon by users to reduce information risk Client External Users Provides capital Client provides financial statements to users

16 Assurance Services

17 Assurance Services An independent professional service
Can be performed by CPAs or by a variety of other professionals Assurance services are independent professional services that improve the quality of information for decision makers.

18 Attestation Services A type of assurance service
CPA reports on the reliability of an assertion That is the responsibility of another party.

19 Client provides financial statements to users
Attestation Services 1. Audit Five Categories: 3. Review Historical Financial Statements 2. Internal Control over Financial Reporting In the audit of historical financial statements, management asserts that the statements are fairly stated in accordance with applicable US or international accounting standards. For an audit of internal controls over financial reporting, management asserts that internal controls have been developed and implemented following well-established criteria. For a review of historical financial statements, management asserts that the statements are fairly stated in accordance with accounting standards which are the same as for audits. For attestations on information technology, management makes various assertions about the reliability and security of electronic information. CPAs provide numerous other attestation services and many of these are natural extensions of the audit of historical financial statements as users seek independent assurances about other types of information. 5. Other 4. Information Technology Client provides financial statements to users

20 Attestation Services on Information Technology
WebTrust and SysTrust also meet the criteria of attestation service

21 Other Assurance Services
Most of the other assurance services that CPAs provide do not meet the formal definition of attestation services. The CPA is not required to issue a written report. The assurance does not have to be about the reliability of another party’s assertion about compliance with specified criteria.

22 Green Initiatives Bring Assurance Opportunities, Competition
Global interest has triggered a surge in reports. 80% of the Global Fortune 250 released environmental, social, and governance data. Presented in standalone reports or integrated into annual financial reports.

23 Other Assurance Services Examples
Assess risks of accumulation, distribution, and storage of digital information… including assessing security risks and related controls over data and other information stored electronically, including the adequacy of backup and off-site storage.

24 Other Assurance Services Examples
Compliance with trading policies and procedures Compliance with entertainment royalty agreements ISO 900 certification Environmental audit

25 Assurance, Attestation, and Nonassurance Services

26 Types of Audits

27 Types of Audits Operational Compliance Financial Statement

28 Operational Audit Example Evaluate computerized payroll system
for efficiency and effectiveness Information Number of records processed, costs of the department, and number of errors Established Criteria Company standards for efficiency and effectiveness in payroll department The operational audit evaluates the efficiency and effectiveness of any part of an organization's operating procedures and methods. Available Evidence Error reports, payroll records, and payroll processing costs

29 Compliance Audit Example Determine whether bank requirements
for loan continuation have been met Information Company records Established Criteria Loan agreement provisions A compliance audit is conducted to determine whether the auditee is following specific procedures, rules or regulations set by some higher authority. Some examples may include determining whether accounting personnel are following procedures prescribed by the controller, review wage rates for compliance with minimum wage laws, and examine contractual agreements with bankers and other lenders to be sure the company is complying with legal requirements. Available Evidence Financial statements and calculations by the auditor

30 Audit of Historical Financial Statements
Example Annual audit of Boeing’s financial statements Information Boeing's financial statements Established Criteria Generally accepted accounting principles Available Evidence Documents, records, and outside sources of evidence

31 Types of Auditors

32 Types of Auditors Independent certified public accounting firms
Governmental general accounting office auditors Internal Revenue agents Internal auditors

33 Requirements for CPA

34 Three Requirements for Becoming a CPA
Educational requirement Uniform CPA examination requirement Experience requirement

35 CPA Examination Sections
Auditing and Attestation Financial Accounting And Reporting Business Environment and Concepts Regulation

36 Three Requirements for Becoming a CPA

37 Persyaratan dan Definisi Di Indonesia
Akuntan Publik Persyaratan dan Definisi Di Indonesia

38 Dasar Hukum Undang-undang Republik Indonesia Nomor 5 Tahun Tentang Akuntan Publik, tanggal 3 Mei 2011 Peraturan Pemerintah Republik Indonesia Nomor 20 Tahun Tentang Praktik Akuntan Publik, tanggal 6 April 2015

39 Definisi dan Jasa yang Diberikan
Akuntan Publik adalah seseorang yang telah memperoleh izin untuk memberikan jasa jasa asurans, yang meliputi: a. jasa audit atas informasi keuangan historis; b. jasa reviu atas informasi keuangan historis; dan c. jasa asurans lainnya. Jasa asurans tersebut hanya dapat diberikan oleh Akuntan Publik. Selain jasa asurans Akuntan Publik dapat memberikan jasa lainnya yang berkaitan dengan akuntansi, keuangan, dan manajemen sesuai dengan ketentuan peraturan perundang-undangan.

40 Persyaratan Izin Akuntan Publik (AP)
Untuk mendapatkan izin menjadi Akuntan Publik seseorang harus memenuhi syarat sebagai berikut: memiliki sertifikat tanda lulus ujian profesi akuntan publik yang sah; berpengalaman praktik memberikan jasa; berdomisili di wilayah Negara Kesatuan Republik Indonesia; memiliki Nomor Pokok Wajib Pajak; tidak pernah dikenai sanksi administratif berupa pencabutan izin Akuntan Publik; tidak pernah dipidana yang telah mempunyai kekuatan hukum tetap karena melakukan tindak pidana kejahatan yang diancam dengan pidana penjara 5 (lima) tahun atau lebih; menjadi anggota Asosiasi Profesi Akuntan Publik yang ditetapkan oleh Menteri; dan tidak berada dalam pengampuan. Ijin diberikan untuk masa 5 Tahun Akuntan Publik wajib mendirikan atau menjadi Rekan pada KAP dalam jangka waktu 180 (seratus delapan puluh) hari sejak izin Akuntan Publik yang bersangkutan diterbitkan

41 Persyaratan Ujian Profesi Akuntan Publik (CPA)
Untuk mengikuti ujian profesi Akuntan Publik, seseorang harus: memiliki pengetahuan dan kompetensi di bidang akuntansi atau telah terdaftar dalam register negara untuk akuntan. Pengetahuan dan kompetensi di bidang akuntansi iperoleh melalui: program pendidikan sarjana (S-1) atau diploma empat (D-IV) di bidang akuntansi pada perguruan tinggi Indonesia atau perguruan tinggi luar negeri yang telah disetarakan oleh pihak yang berwenang sesuai dengan ketentuan peraturan perundang-undangan; program pendidikan pascasarjana (S-2) atau doktor (S-3) di bidang akuntansi yang diselenggarakan perguruan tinggi Indonesia atau perguruan tinggi luar negeri yang telah disetarakan oleh pihak yang berwenang sesuai dengan ketentuan peraturan perundang-undangan; pendidikan profesi akuntansi sesuai dengan ketentuan Peraturan Perundang-undangan; atau pendidikan profesi Akuntan Publik sesuai dengan ketentuan Peraturan Perundang-undangan.

42 Persyaratan Sertifikat Tanda Lulus Ujian Profesi Akuntan Publik (CPA)
Untuk memperoleh sertifikat tanda lulus ujian profesi Akuntan Publik yang diterbitkan oleh Asosiasi Profesi, seseorang harus memenuhi persyaratan sebagai berikut: lulus ujian profesi Akuntan Publik; lulus pendidikan sebagaimana dimaksud dalam Pasal 3 ayat (2) atau terdaftar dalam register negara untuk akuntan; lulus penilaian pengalaman kerja di bidang akuntansi dari Asosiasi Profesi; dan terdaftar sebagai anggota Asosiasi Profesi. Seseorang yang telah memperoleh sertifikat tanda lulus ujian profesi Akuntan Publik mendapatkan sebutan profesi dari Asosiasi Profesi. Saat ini sebutannya adalah Certified Public Accountant (CPA)

43 End of Chapter 1

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