Dear Auditing Committee, I have compared what the audit and review service entails per your request.
Audit Services An audit service provides financial statement users with an opinion on whether the financial statements are presented and prepared fairly in accordance with the applicable financial accounting framework (Arens & Elder, 2014). Its responsibilities are to detect misstatements in the financial statements, identify weaknesses in the internal controls over the financial reporting, and substantiate samples of the financial statements. The audit is considered the highest level of assurance for third parties because of the testing of sample items on the financial statements. The auditor can check bank statements to verify cash or physically inspect a warehouse to verify inventory.
The benefits of an audit service are that it's the highest level of service that a CPA can perform. This is the service that would give the most assurance and degree of confidence that the financial statements are accurate. The audit service also can provide suggestions to improve the internal controls (What is the Difference, 2010). As part of the audit, it is required to gain an understanding of the internal controls. The …show more content…
This is important because when you are auditing financial statements and see an item that looks incorrect your first assumption shouldn’t be fraud but that an error may have occurred. The characteristics of skepticism are a questing mindset, suspension of judgment, search for knowledge, interpersonal understanding, autonomy and self-esteem (Arens & Elder, 2014). The most important standard is independence. Professional skepticism is independence of the mind but that can’t be if a relationship between the auditor and company is present. There can be no personal interest in the outcome in the audit that would make the auditor not provide the most accurate