4 types Of Assurance Services You Should Know

There are various assurance services that any organisation can explore. If you are unsure which assurance service can help your company, don’t fret. This blog highlights five of them.

But before we dive in, first things first:

What Are Assurance Services?

Assurance services are various independent professional services usually provided by certified auditors or chartered accountants.

 They include a review of any financial document or transaction, Trust Account Audits, and more. 

The main objective behind assurance services is to assure management, the Board, and regulators that financial statements are accurate and operations are done in accordance with applicable policies and regulations.

Example:

GMZ Tech has a quarterly financial statement audit. Today, Amanda, an independent auditor comes to test the turnover account on the income statement. Amanda does this by making sure that the annual R20 million turnover is accurate.

To validate this figure, Amanda needs to ensure that sales totalling R20 million occurred in the last 12 months. She will need to see sales statements to verify the origins of those sales. 

Amanda will then certify the correctness and validity of the turnover account on a financial report.

The Benefits Of Assurance Services

Assurance services are some of the essential services for any business. You can use them to improve your company’s quality of information and to make binding decisions.

1. Explore opportunities 

Additionally, assurance services assure you that the information on a document is reliable and protects your company against any information risk. 

As an entity, you’ll get to explore business opportunities with peace of mind knowing that you’re protected from complexities and risks presented by third-party relationships.

2. Increase transparency 

You’ll also use assurance services to increase the transparency, relevance, and value of the information you disclose to the market and potential investors. 

3. Credibility 

Assurance gives more credibility to your business reporting processes.

4. Advice and recommendations 

You’ll get professional advice and recommendations during the assurance process.

5. Valid conclusions

Perhaps one of the benefits of using assurance services is that you’ll be able to make more valid conclusions from the accounts.

Let’s take a look at some of the assurance services that you should explore:

Types of Assurance Services

1. Independent Reviews 

If you’re looking for independent reviews of your financial statements, documents, or accounts, you should consider outsourcing assurance services.

The assurance service will evaluate your entity’s performance to see if you will be able to reach goals and objectives.

2. External Audit Services 

An external audit will improve your internal systems and controls. Professional Auditors will do this by focusing beyond numbers. They will gain a thorough understanding of all systems and controls of your business.

3. Agreed Upon Procedures

If you want someone to evaluate the agreed-upon procedures, there is no other best-qualified person who can do this than a Chartered Accountant (CA).

A CA will ensure that procedures are sufficiently clear, unambiguous, and detailed to benefit external auditors, business partners, investors, stakeholders, and financial institutions.

4. Trust Account Audits

If you’re a solicitor, legal practitioner, or advisor of a Trust Account, you are required to audit that trust account annually. Only a certified Auditor or CA can audit a trust account.

5. Estate Agency

Every estate agent entrusted to a third-party requires an independent audit. According to Estate Agency Affairs Act, only a qualified Auditor can perform that audit.

Contact us today so we can help simplify your compliance! Email info@mgt-accounting.co.za