Independence and Objectivity”

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  • #208123

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    This forum is restricted to members of the associated course(s).

    Shahnaz Parekh
    Participant

    Hi Brian,

    I would like to confirm the following to make sure i understand the difference between assurance and consulting services.

    IA cannot provide assurance service when they are transferred from another department until a year however, they can provide consulting services to operations for which they had previous responsibilities (no 1-year rule).

    Thank you
    Shahnaz Parekh.

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  • #208134

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    Brian Hock
    HOCK international

    Shahnaz,

    Yes, that is correct. The requirements connected to the concept of independence for assurance engagements are not applicable to the consulting engagements.

    There may be other reasons that the CAE does not want a person to do a consulting engagement in an area where they were recently working, but it would not be because of this independence related issue.

    Brian

    #208144

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    Shahnaz Parekh
    Participant

    Thank you, Brian, for quick responses. i really appreciate it

    #209772

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    Hamid Ahmed Daoud
    Participant

    Hi Brian
    i was took the exam before month i face complicate question between assurance and consultant try to explain more for me in this areas
    thanks

    #209814

    This forum is restricted to members of the associated course(s).

    Brian Hock
    HOCK international

    Hamid,

    That is a very broad question that I am not sure how to answer.

    In an assurance engagement, we are determining if something is or is not working properly. For example, whether or not the internal control is doing what it is supposed to be doing.

    In a consulting engagement, we providing our best guidance and recommendation. We are making a specific recommendation about what we think should be done in a specific situation.

    These are the definitions from the Glossary:

    The Standards Glossary defines assurance services as:
    An objective examination of evidence for the purpose of providing an independent assessment on governance, risk management, and control processes for the organization. Examples may include financial, performance, compliance, system security, and due diligence engagements.

    The Standards Glossary defines consulting services as:
    Advisory and related client services, the nature and scope of which are agreed upon with the client and which are intended to add value and improve an organization’s operations. Examples include counsel, advice, facilitation, process design and training.

    The fact that we need to be independent to perform an assurance engagement and not for a consulting also tells about them. In an assurance engagement we are looking at it without emotion – just based on the facts that we discover during the engagement. For a consulting engagement we are supposed to provide the best advice for the company – we want the company to succeed, so we are not supposed to be independent in a consulting enagement.

    Does this help?

    Brian

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