Attestation engagement definition
/What is an Attestation Engagement?
An attestation engagement is an arrangement with a client where an independent third party investigates and reports on subject matter created by a client. This third party is usually a certified public accountant (CPA). The CPA then produces a report that states the conclusions of the analysis, covering such matters as the accuracy and reliability of the underlying subject matter, or its compliance with certain criteria. This report gives users a higher level of confidence regarding the subject of the engagement.
Characteristics of an Attestation Engagement
The key characteristics of an attestation engagement are as follows:
Involves a subject matter or assertion. The engagement focuses on a specific subject matter (e.g., compliance, financial forecasts, internal controls) or an assertion made about the subject matter. The subject matter must be capable of evaluation against agreed-upon criteria.
Three-party relationship. The engagement includes the party responsible for the subject matter or the assertion, the professional performing the engagement, and the audience for the resulting attestation report.
Use of established criteria. The subject matter must be evaluated against appropriate criteria that are objective, measurable and complete.
Independent assurance. The practitioner must be independent of the responsible party to ensure objectivity and credibility.
Risk assessment and evidence collection. Practitioners assess risks and gather sufficient, appropriate evidence to support the conclusion in the report.
Written report. The engagement concludes with a written report that communicates the practitioner's findings and level of assurance.
Examples of Attestation Engagements
Examples of attestation engagements are as follows:
Reporting on financial projections made by a client
Reporting on a client’s system of internal controls
Reporting on pro forma financial information formulated by a client
Reporting on how well the internal controls in a client process function
Reporting on the efficacy of a client’s environmental sustainability measures
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