Auditing and Assurance Services and the Level of Assurance

Discussion Questions
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Response to question 1
The advantage that a firm gains by using auditing and assurance services is that by using assurance services, the company will be able to improve the quality of information for decision makers. Auditing and other assurance services essentially take a close look at the company, its fiscal reports, and its daily operations to establish where resources of the company are going and how they are utilized. This type of internal audit may find problems which might actually be causing lost revenue. Reporting mistakes, productivity issues and even unprincipled workers could all impact a company’s profitability. Auditing and assurance services could find these issues so that the firm’s management can address them (Fazal, 2012). Auditing and assurance services also provide the most accurate picture of the firm’s fiscal position which can be used in assessing the firm’s past and gain insight into the firm’s future. I might use these advantages in promoting the auditing and assurance division within a company by enlightening decision makers and the top management of the company about the crucial role the division plays in the company and how it is integral to the firm’s overall success.
Response to question 2
The relationship among the client, auditors and external auditors is basically as follows: the client hires the auditor; the auditor will then issue report which is relied on by users to reduce information risk; the client then provides the fiscal information to the external users; and the external users give financial capital to the client (Gieger, Lowe & Pany, 2011). It is of major importance for an audit client to use an independent auditor considering that the closer the relationship between the client and the auditor, the higher the perception of inaptness, and the less likely the external user will provide a loan or capital (Gieger, Lowe & Pany, 2011). Professional standards for CPAs govern these relationships primarily through auditor independence for client firms. CPA firms are expected to be independent and not to perform both the extern...