Group Report on Demand for Assurance and Benefits - HI6026 T3 2019

This report examines the increasing demand for auditing and assurance services in modern business environments, highlighting their crucial role in ensuring the true and fair view of financial positions and preventing financial scandals. It explores the factors driving this demand, such as the complexities in reporting systems and the need for transparency. The report delves into the benefits of assurance services, including providing comfort to management, protecting stakeholder interests, and ensuring compliance with auditing standards. It also analyzes the stakeholders involved, categorizing them into internal and external groups. Furthermore, the report discusses the theories underlying assurance services, such as agency theory, and the conditions that necessitate independent financial audits. Finally, it outlines the benefits of implementing auditing standards, such as fraud detection and enhanced organizational reputation. The report draws on various sources to support its findings, emphasizing the importance of assurance in maintaining ethical business practices.

Demand for auditing and assurance
The auditing and assurance service is essential for ensuring that the organization is giving true
and fair view of the financial position .
In the modern days with the increase of the financial scandals the demand for the assurance
services increases (Emeka-Nwokeji Damian and Okeke 2017).
Emeka-Nwokeji, N.A., Damian, O.C. and Okeke, P.C., 2017. Providing Assurance Services as a
Tool for Improving the Quality of Voluntary Disclosures: A Survey of Users’ Perception. African
Journal of Education, Science and Technology, 3(3), pp.183-199.

Demand for auditing and assurance
With the increase of the complexities in the reporting system the assurance services provide comfort to the
management in taking efficient decisions,
The assurance services ensures that the organizations take responsibility in protecting the interest of the
stake holders (Laing and Hoy 2018).
Laing, G.K. and Hoy, S., 2018. A Retrospective of Professional Liability of Auditors in Australia. The
Journal of New Business Ideas & Trends, 16(1), pp.44-55.
Landais, G., Ocvirk, P., Allen, M., Brouty, M., Perret, E., Pouvreau, T. and Vannier, P., 2019, October.
Quality Assurance in the Ingestion of Data into the CDS VizieR Catalogue and Data Services.
In Astronomical Data Analysis Software and Systems XXVII (Vol. 523, p. 309).

Demand for auditing and assurance
With the demand for bringing more transparency in the business activities the need for the assurance
services also increases.
The application of the assurance services become compulsory for big concerns and the board of
directors are also responsible to follow the guidelines provided by the auditing and assurance
standards.
Salman, T., Zolanvari, M., Erbad, A., Jain, R. and Samaka, M., 2018. Security services using
blockchains: A state of the art survey. IEEE Communications Surveys & Tutorials, 21(1), pp.858-880.

Demand for auditing and assurance
The companies should give all the details of their financial transactions and should disclose all the major changes
that they made in the financial statements.
The assurance services forces the companies to disclose the different sources in which they utilize the resources of
the investors (Mihret. and Grant 2017) .
Mihret, D.G. and Grant, B., 2017. The role of internal auditing in corporate governance: a Foucauldian
analysis. Accounting, Auditing & Accountability Journal.

Demand for auditing and assurance
The assurance services give more emphasis on the protection of the interest of the stakeholders
The assurance guidelines are made in such a way that it helps to avoid the conflict of interest between the
stakeholders and the organization (Farooq and De Villiers 2019.).
Farooq, M.B. and De Villiers, C., 2019. Sustainability assurance: Who are the assurance providers and what
do they do?. In Challenges in Managing Sustainable Business (pp. 137-154). Palgrave Macmillan, Cham.

Demand for auditing and assurance
The assurance a services uses three theories to protect the interest of the investors
these are
Agency theory
Insurance hypothesis
Information hypothesis (Havelka and Merhout 2018)
Havelka, D. and Merhout, J.W., 2018. INFORMATION ASSURANCE QUALITY
FACTORS: A COMPARISON OF MANAGER VERSUS STAFF
PERSPECTIVES. Issues in Information Systems, 19(3).

Demand for auditing and assurance
The four c0onditions that create the need for the independent financial audit report are
Detection of fraud
Need of credibility
Protection of stakeholder’s interest
Maintenance of ethics (Ho 2019)
Ho, N., 2019. Competition in the Market for Assurance Services (Doctoral dissertation, Carnegie Mellon
University).

Demand for auditing and assurance
Stakeholders analysis
The stakeholders of the organization are classified into two categories these are
External stakeholder and
Internal stakeholders (Lessambo Lessambo and Weis 2018)
Lessambo, F.I., Lessambo, F.I. and Weis, 2018. Auditing, Assurance Services, and Forensics. Springer
International Publishing.

Demand for auditing and assurance
Internal stakeholders
The internal stakeholders are
Managers
Board of directors
Employees (Wu and Li AT&T Intellectual Property 2019)
External stakeholders are
Investors
Customers
Suppliers and the
Society
Wu, T.H. and Li, W.J., AT&T Intellectual Property I LP, 2019. Context-Aware Virtualized Control Decision Support
System for Providing Quality of Experience Assurance for Internet Protocol Streaming Video Services. U.S. Patent
Application 16/186,903.

Demand for auditing and assurance
Benefits of the implementation of the auditing standards
Detection of fraud
Assuring the information contained in the financial statements
Increases the reputation of the organization
It ensures that the company provides true and fair view of the organization.

Demand for auditing and assurance
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