1. Chapter 21 Assurance, Attestation, and Internal Auditing Services Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

2. Assurance Services Assurance services are independent professional services that improve the quality of information, or its context, for decision makers. LO# 1 21-2

3. LO# 1 Assurance Services 21-3

4. Types of Assurance Services Risk Assessment Business Performance Measurement Information System Reliability Electronic Commerce Health Care Performance Measurement PrimePlus LO# 2 21-4

5. Attest Engagements Attest services occur when a practitioner is engaged to issue, or does issue, an examination, a review, or an agreed upon procedures report on subject matter, or an assertion about subject matter, that is the responsibility of another party. LO# 3 21-5

6. LO# 3 Attest Engagements Figure 21-3 21-6

7. Types of Attest Engagements Attest Engagements Examination Review Agreed- Upon Procedures LO# 4 21-7

8. Attestation Standards GeneralFieldworkReporting LO# 5 21-8

9. Reporting on an Entity’s Internal Control over Financial Reporting The Federal Deposit Insurance Corporation Improvement Act of 1991 requires that the management of large financial institutions issue a report on the effectiveness of the institution’s internal control and that they engage accountants to attest to management’s report. The Sarbanes-Oxley Act of 2002 imposed similar requirements on all publicly held companies. LO# 6 21-9

10. Financial Forecasts and Projections CPAs can be engaged to examine, apply agreed- upon procedures, or compile the prospective financial statements if such statements are expected to be used by a third party. LO# 7 21-10

11. Accounting and Review Services CompilationsReviews Many nonpublic companies do not choose to contract for an audit of their financial statements. However, these entities often employ a CPA to assist with preparing their financial statements, tax returns, or other financial documents. LO# 8 21-11

12. Internal Auditing Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. LO# 9 21-12

13. Internal Auditors’ Roles Evaluating Risks and Controls Reviewing Compliance Financial AuditingOperational Auditing LO# 9 21-13

14. Trust Services Security Availability Processing Integrity Online Privacy Confidentiality Five Principles of Trust Services LO# 10 21-14

15. End of Chapter 21 21-15