Accounting, Auditing, and Assurance Services

The purpose of this article is to provide definitions of accounting, auditing, and assurance services. In addition, the relationship between accounting, auditing, and assurance services will be explained and examples will be provided.

Definitions

Accounting services can be defined as the preparation and analysis of financial information which is reported to internal and external users via financial statements. Auditing services involve evaluating the reliability and credibility of financial information, as well as "the systems and processes responsible for recording and summarizing that information" (Messier, Jr., Glover, & Prawitt, 2006, p. 5-6). Assurance services can be defined as independent professional services that evaluate the reliability, credibility, relevance, and timeliness of information in order to improve the quality of information for decision makers (Messier, Jr. et al., 2006, p. 15). Assurance services may or may not be associated with financial information.

Relationship

The relationship between accounting and auditing can be compared to the relationship between an author and editor. Like the author, the accountant creates the material, in this case financial statements and reports. Like the editor, the auditor examines the material and suggests changes and corrections that must be made in order to meet the reliability and credibility requirements specified by the company and outside agencies, such as the Financial Accounting Standards Board (FASB). Assurance services take things one step further by examining the material to insure it meets relevance and timeliness requirements.

Examples