Definition:
Assurance services are professional services provided by accountants that involve issuing opinions on the reliability of financial information. These services are designed to enhance the credibility of financial information and provide assurance to users of that information.
Common types of assurance services:
- Financial audits: Audits of financial statements to provide an opinion on their fairness and compliance with generally accepted accounting principles (GAAP).
- Reviews: Limited assurance engagements that involve a review of financial statements to provide a moderate level of assurance.
- Agreed-upon procedures engagements: Engagements where the auditor performs specific procedures agreed upon with the client and provides a report on the findings.
- Other assurance services: Other assurance services may include audits of internal controls, reviews of financial forecasts, and attestations of compliance with specific regulations.
Why are assurance services important?
- Credibility: Assurance services enhance the credibility of financial information, making it more reliable for decision-makers.
- Investor confidence: Assurance services can help to build investor confidence by providing assurance that financial information is accurate and reliable.
- Regulatory compliance: Assurance services can help companies comply with regulatory requirements.
- Risk management: Assurance services can help to identify and mitigate risks associated with financial reporting.
In essence, assurance services are professional services provided by accountants that provide assurance to users of financial information, and they are essential for maintaining the integrity and credibility of financial reporting.
