What Are Assurance Services and Why Are They Important
What Are Assurance Services, and Why Are They Important?
What Are Assurance Services?
Assurance services are independent professional services provided by certified or chartered accountants, such as CPAs, who review financial documents or transactions to certify their correctness and validity.
Key Takeaways
- Assurance services improve information quality for decision-makers.
- They reduce information risk, enabling better decision-making.
- Businesses use assurance services to increase transparency, relevance, and value.
- Assurance services can be applied to risk assessments, business performance, information systems reliability, e-commerce, and healthcare performance.
Understanding Assurance Services
Assurance services improve the quality of information for decision-makers, reducing information risk. Providers help clients manage and monitor risks in partner networks, increasing transparency, relevance, and value of disclosed information. Sharing business performance fuels sustainable growth and competitive differentiation.
Technical guidance for certified accountants engaging in assurance services can be found in ISAE 3000 and The Assurance Sourcebook published by ICAEW.
Regulations like the Sarbanes-Oxley Act of 2002 have increased the demand for assurance services to protect investors from false financial information.
Types of Assurance Services
Assurance services come in various forms and provide relevant information to facilitate decision-making. For example, a client may request a CPA to review calculations on their mortgage website. The most common assurance services include:
Risk Assessment
Ensuring comprehensive identification and management of business risks.
Business Performance Measurement
Evaluating performance measures for achieving goals and comparing competitor performance.
Information Systems Reliability
Assessing the reliability of internal information systems for operational and financial decisions.
Electronic Commerce
Assessing the integrity, security, privacy, and reliability of electronic commerce systems.
Healthcare Performance Measurement
Providing assurance on the effectiveness of healthcare services provided by HMOs, hospitals, doctors, and other providers.
