Question

Task • Discuss the following statement "Attestation standards are similar to the fundamental auditing principles, however, some important differences exist"

Answer 1

Attestation standards are similar to the fundamental auditing principles; however, some important differences exist. The general standards concern the practitioner’s knowledge about the subject matter of the engagement and having suitable criteria by which to measure the subject matter.

To be suitable, the criteria must be objective, measurable, complete, and relevant. The attestation standards do not require an evaluation of internal controls although such an evaluation may be necessary, particularly in an examination engagement. In financial statement audits, the measurement criteria or appropriate financial reporting framework is the financial reporting framework adopted by management and, when appropriate, those charged with governance in the preparation of the financial statements that is acceptable in view of the nature of the entity and the objective of the financial statements, or that is required by law or regulation.

They include generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), and special purpose frameworks (discussed later in this module); therefore, the determination of suitable measurement criteria has already been established. In engagements in which GAAP, IFRS, or special purpose frameworks are not suitable measurement criteria, the identification of the appropriate criterion may be difficult and time-consuming. The reporting standards restrict the distribution of the reports to persons who will understand the subject matter.

The goal of attestation standards are to provide guidance, set boundaries around a growing service line, define a measure of quality, and outline the objectives that should be reached when performing attestation engagements.

As mentioned above, the SSAEs adopt many of the standards followed under GAAS but differ in two main ways. First, the SSAE, unlike GAAS, does not reference financial statements within the reports, since the reports are not centered around the fair presentation of them. Second, SSAEs differ as they do not reference GAAS within SSAE reports for the same reason.

Basically, An audit is a form of attestation.An audit can be many things. A lot of people think its purely a financial statement or examination but you can have things such as performance audits, operational audits, etc. It isn’t just one thing.

An attestation is when you are doing some form of review or audit and you have to be independent. Internal auditors don’t do attestations generally, it is usually a third party that has nothing to do with the client on a working relationship and are performing their job utilizing the required regulations/framework (such as GAAP, GAGAS, BARS, etc).