 In this presentation we will discuss types of audit, a test, and assurance services when we consider these types of definitions. Support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Since we are in essence thinking about what CPA firms do, what are the services that CPA firms provide, when we think about public accounting, what are the types of things that public accounting firms do. The first thing that comes to mind for most people are audits or at least most accounting students. When you think about accounting and you're ending up with an accounting degree, you're typically thinking if you want to go into public accounting that you're going to be dealing with audit or you might be considering dealing with tax. These are two types of things that many people depending on where we are coming from, think about with regards to independence say CPA type firms audit and tax. We want to have a fuller understanding of what a CPA firm, what a public accounting firm would provide what those services would be for a couple different reasons. One, we want to expect we want to know what to expect if we were to work in public accounting say as opposed to a for profit type of organization. Two, we want to know if we were going to do business with a public accounting firm, what types of services they may provide so that we know how to look for the types of services needed within a public accounting firm. And three, as we think about audit engagements and a test type engagements, we need to know that there's going to be some conflict with regards to independence, which we'll talk about later. In other words, what type of services can we do and still remain somewhat independent and be able to do what what many CPA firms see as the largest component. If they do do full audits, then we want to say, okay, if we're doing audits, part of the components of being an auditor is to be independent. And we cannot be independent if we're too involved with say management type of activities or possibly in some other ways with the company that we are auditing. And therefore there could be conflict with the types of services we can provide as well. So we want to keep that in mind as we go through the different types of services as well. So what type of services does a typical CPA firm public accounting firm provide? And what then later on, we'll think more about what type of conflicts there could be with the potential services that would be provided. And as we do so, note that it makes perfect sense if we do audits for a certain type of company that we would know their accounting system quite well and may want to do other types of things to help them run their business more smoothly. But as we do so, we become more related, our dependence or our independence from them gets diminished, which reduces the value of our audit opinion, because our audit opinion is supposed to be something that is independent. So as we go through these services, we want to keep that in mind, we'll talk more about independence in the future types of auditors include the external auditors, internal auditors, government auditors and forensic auditors. We here will usually be considering the external auditors when we're thinking about a CPA firm, we're typically thinking or public accounting of the external auditors, we're typically thinking about something that's not related to the company. And that's part of the benefit of who they are, they can give their opinion because they're not related to the company, have an external auditor that comes in, they're paid, but they're not in any other way, or they're not in any significant other way related to the company, they have independence in that format. That's what we're going to be considering and focusing most of our time in on. Then we have internal auditors, internal auditors are going to be within the organization. Now they can do many of the same functions as an external auditor, they could they could perform the same type of procedures. And in some cases, the external auditor may depend on some of the work that is being done by the internal auditor. However, the internal auditor has a disadvantage in terms of the appearance, at least if not in fact of their opinion, because they're employed by the company, they're getting their paycheck from the company. So if I was a third party, thinking about investing in say a company, I may not put as much value on the internal auditor, even though they may have done a great job done the same type of work, because they're less independent, they have more dependence on the company, they're being paid, they're an employee of the company. So they're going to be an important tool and they and they have their uses as well. However, they're going to be distinct in from the external auditors in that these are people that are employed by the company W2 employees typically of the company external auditors still being paid by the company, but they're an external firm and not being paid basically as an employee of as an internal auditor, both separate professions, they are or they're both similar type of professions, both have their their uses and their place, but they're distinct in that way as well. Then we have the government auditors. Now when we think of government auditors, we're typically thinking about auditors that are auditing in essence, the government. So the government may be then looking for someone to audit governmental entities. Now if you're having the government audit governmental entities, it's quite possible that the governmental auditors might be asking other governmental entities to audit itself. So in some ways, then you might say that governmental audits are often internal in that way because governments employees are auditing other government employees possibly. But again, often a specialty type of field when we're talking about the governmental auditors, we here gonna be focusing most of our time on the external auditors. And then we have a forensic auditors which have been growing a field that's been been growing in some ways, which is going to be more specific as well, focusing in on forensic areas. And of course, their focus is more on fraud or something like that. They're typically going to be employed to audit and look specifically for criminal type of activity oftentimes, whereas when we're thinking about a normal type of audit process from the external audit, we're looking for any type of material misstatement, whether it be caused by fraud or some error or whatever reason it be cause our goal here on the external auditors typically is going to be looking for that material misstatement to give an opinion on the financial statement as opposed to in essence looking specifically for matters and components of fraud or illegal type of activity types of services. So types of services typically include the audit services, a test services, assurance services and non audit services. So we talked a bit in depth in prior presentations on the difference between these these items and the overlap between the audit services, the attest services, and then the assurance services. And then we might have, you know, basically the non audit type of services as well. These being, you know, what the CPA firm will typically do, we'll go into a little bit more depth on some of these items here. Audit services can include different types of audits, right? We could be auditing different types of things. And again, our goal in an audit is typically going to be to give an opinion. We're basically giving our opinion on something. Why is that valuable? Why would someone pay for that? Because it's an external opinion that's going to make it easier typically for business transactions to happen. Like if I don't know somebody else, I don't know them. I want to basically have some assurance about whether I should do business with this other person. I want an independent third party opinion might make it more easy for business transactions to take place. And again, without any trust between individuals, firms, business associations, there is no business business stops. So that's good. That's going to be the major benefit that we have there. So we could have internal control audits, basically audits on the effectiveness of the internal controls. And you can think of internal controls as checks and balances, similar to what we have in a governmental unit. And we'll talk more about internal controls a lot in future presentations. Compliance audits, are we in compliance with rules and regulations? So there might be certain standards, especially in certain industries, such as a homeowners association or something like that could have specific kind of rules that need to be in compliance with with regard to specific types of things and financial reporting related to it. Then we may be able to, you know, audit in terms of a compliance audit. Operational audits, we might go through an audit of the operation. And usually that would be conducted to see if things are being used efficiently. Are the operations being done well? Are there are the tools and resources of the organization being used efficiently? And then we could have forensic audits. So this might be a type of audit, again, looking specifically usually for some type of illegal acts, we might be looking for employee fraud or something like that, specifically looking into some type of forensic type of activity, typically some legal type of activity, criminal type of activity, possibly with regard to the audit. We've taken a look at a test services in prior presentation. Let's take a look at some of the non audit services. So these are going to be some of the non audit services include tax preparation and this