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Assurance services are a type of unaffiliated professional service that raises the standard or context of information for decision-makers. These are typically offered by certified or chartered accountants, such as CPAs or CCAs, who assess the systems and procedures used by a business or organization.
The purpose of assurance services is to lessen information risk, which is the risk that the data utilized for making decisions is incorrect, erroneous, or incomplete. The accountants boost the confidence and trust of the targeted information users, such as investors, creditors, regulators, or management, by offering assurance.
Financial statement audit is one of the most popular forms of assurance services. It entails examining a company's or organization's financial statements in order to offer an opinion on whether they were prepared in conformity with an applicable financial reporting framework, such as GAAP or IFRS. By carrying out numerous actions, including questions, observations, inspections, confirmations, calculations, and analytical procedures, the auditor gathers sufficient and pertinent evidence to support the opinion. The auditor also assesses the entity's internal control system and looks for any major inaccuracies or fraud concerns. The view and any additional findings or suggestions are communicated in the report that the auditor issues.
Audits of financial statements are only one type of assurance service, though. They may also touch on other informational topics, like:
- Risk assessments: Assurance services can assist in locating and assessing any risks that could compromise a project's or an organization's ability to achieve its goals. The assurance provider may also make recommendations for appropriate risk management or mitigation measures.
- Business performance: With the use of benchmarks, best practices, or key performance indicators (KPIs), assurance services can assist in measuring and evaluating an organization's or project's success. Also, the assurance supplier may offer opinions and ideas for development or enhancement.
- Information systems reliability: An organization or project's information systems and technology use can be evaluated for dependability and security with the aid of assurance services. In order to find any flaws or vulnerabilities, the assurance provider can evaluate the technology and systems for functionality and usability.
- E-commerce: Assurance services can help in confirming the legitimacy and accuracy of the data transferred and the transactions made possible by e-commerce platforms and websites. The assurance provider can also assess how well confidentiality and privacy are protected, as well as compliance with pertinent laws and regulations.
- Healthcare performance: Assurance services can be used to assess the effectiveness and caliber of healthcare services offered by a project or an organization. The assurance provider can also assess the effectiveness of patient care and safety as well as compliance with pertinent standards and legislation.
The demand for assurance services has increased in recent years due to various factors, such as:
- Business environment's complexity and ambiguity
- Economies are becoming more global and digital.
- New dangers and opportunities that have arisen
- More stringent stakeholder expectations and demands
- New rules and regulations being created
The global market for assurance services was estimated to be worth $223 billion in 2019 by PwC, and from 2020 to 2025, it is projected to expand at a compound annual growth rate (CAGR) of 4.6%. The research also noted a few major developments and factors that are driving demand for assurance services, including:
- In a turbulent world, there is a need for transparency and trust
- Acceptance of novel ideas and developments
- Social responsibility and sustainability are changing
- Changes to business models and processes
- Variety of service options and delivery channels
