Audit, assurance and related services at S&W

Current as of April 2018

In our article in last month’s newsletter, “Audit, assurance or something in between?”, we provided an outline of the benefits of engaging an assurance service provider and how their services help deliver value to your business, stakeholders and other key relationships and objectives.

Continuing this series of articles, we will be providing details of the different types of services on offer at S&W, their benefits, and importantly the value S&W feel these can bring to you. These are summarised broadly as follows

 

This month we provide an outline of the “other” assurance related services which are not necessarily driven by legislative needs, but more geared to help organisations meet their internal objectives.

Other assurance related services may broadly be categorised as follows:

  • Agreed-upon procedures
  • Compilation
  • Internal Audit

Agreed upon procedures

The nature and benefits of Agreed upon procedures are often not fully understood, and yet it is one of the more bespoke of services that enable an organisation to target areas of their business and gain a better understanding of areas for improvement, investment, or expected results.

As the name suggests, Agreed upon procedures are specific tests to be undertaken by your assurance advisor as agreed with you or the intended user. These procedures are not designed to support an opinion but are designed to provide factual findings to the end-user.

An agreed-upon procedures engagement provides additional reliable data that specific matters have been performed/addressed.

Examples of when this type of engagement may be particularly useful include:

  • for funding or grant providers, as it can target the area that they are interested in (eg that a grant was received and banked by the organisation, and that specific terms of using the grant were followed);
  • for checking a specific system or process is operating as expected (eg stock count procedure at year end; or the payroll process from timesheet through to payment of wage is occurring in line with documented procedures and controls).

Another more comprehensive example of an agreed upon procedures service is performing a due diligence which is often an engagement when one business acquires another and the acquirer wishes to gain comfort over the financial, legal and overall business attributes over the target entity.

An agreed upon procedures engagement usually results in a report of factual findings being presented by the assurance practitioner to you or the end user explaining the outcome of the procedures that were undertaken and, where appropriate, comparisons to what was originally expected.

Importantly, the end-user of the report then forms their own conclusions from the procedures performed and findings reported.

Compilation

A compilation service is when the accounting professional compiles financial information from underlying records. For example, preparing financial statements based on the underlying books and records in accordance with a given set of accounting and/or legislative standards.

There are varying degrees with which such compilation can be performed and with advances in technology, such information can often be automatically obtained from software such as Xero or MYOB.

However, care should be taken when relying on such information if it has not been prepared by a suitably qualified professional.

A compilation by an assurance practitioner and qualified accountant provides the end user the comfort that the preparation of the information and work carried out has been with professional competence and due care because of the ethical and professional standards with which the practitioner has had to apply in delivering the service.

The end product of a compilation engagement is a report that the practitioner has compiled the information but that the procedures do not include verification or validation procedures and that no assurance is expressed. The compiled information will be attached to the report.

In next month’s article, we will delve deeper into the benefits of due diligence and internal audit as part of the umbrella of other assurance services provided by S&W.

DISCLAIMER
This newsletter has been produced by Stanley & Williamson as a service to its clients and associates. The information contained in the newsletter is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this newsletter, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under Professional Standards legislation.