Types of Assurance Engagements

Nature and scope of an assurance engagement is determined by the internal auditor • Financial assurance provides analysis of the economic activity of an entity as measured and reported by accounting methods • – Consistent with and supports external auditing in many cases – Historical in nature – Assesses veracity of financial statement assertions • Completeness/accuracy • Existence/occurrence • Valuation/allocation • Rights/obligations • Presentation/disclosure Compliance assurance is the review of financial and operating controls to assess conformance with established laws, standards, regulations, policies, plans, procedures, contracts and the like – Answers questions such as • Have we adhered to laws and regulations • Are we currently complying with legal and regulatory requirements • What are our organization’s corporate standards of business conduct • Do all members of our staff and management team consistently comply with internal policies and procedures • Operational assurance is the review of a function or process to appraise the efficiency and economy of operations and the effectiveness with which those functions achieve their objectives – Focuses on Product quality asset safeguarding Customer service corporate responsibility/citizenship Revenue maximization streamlined workflows Expense minimization safety Fraud prevention planning • IT assurance is the review and testing of IT to assure the integrity of information – Often integrated into other audits – Focuses on CONFIDENTIALITY of information and data, INTEGRITY of information and data, and AVAILABILITY of data, information and systems …