Assurance services and other services of the statutory auditor: what do they involve and when to use them?

This article answers the following questions:

• What are assurance services?
• Is the audit of financial statements an assurance service?
• What are the most popular assurance services ordered by businesses from statutory auditors?

In the present-day economic environment, auditors play a crucial role in ensuring the credibility and transparency of data, responding to the growing expectations of the market as well as both local and international regulators. The demand for specialist assurance services provided by professional auditors is systematically increasing, primarily as they are one of the key ways to validate the quality and reliability of financial and non-financial information delivered by businesses.

Which activities make up the assurance services?

Assurance services include a wide range of services of varying scope. These are:

• financial auditing activities,
• assurance services other than financial auditing activities (services not reserved exclusively for auditors),
• related services.

Under the Act on statutory auditors, audit firms and public supervision, assurance services, which constitute financial auditing services, and which may therefore be provided exclusively by statutory auditors, include:

• audits of financial statements,
• reviews of financial statements,
• other assurance services specified by law, reserved for statutory auditors.¹

Which services can be rendered exclusively by statutory auditors?

The assurance services reserved for statutory auditors are intended to provide credibility to, among other things, financial information, non-financial information, systems and processes. The auditor, based on the evidence obtained in the course of the relevant procedures, issues an assessment, which is then included in the report on the service performed.²

Other assurance services of the statutory auditor include:

• accounting audits and audits of the operations of limited liability companies,³
• audits of company transformation plans,⁴
• audits of EU projects and programmes, to the extent that they are reserved exclusively for individuals with the qualifications of a statutory auditor. 

How are other assurance services and related services governed by the National Standards on Assurance Services? 

Assurance services other than audits and reviews of historical financial information are also services provided under the National Standards on Assurance Services (Polish: KSUA) 3000 (Z) Assurance services other than audits or reviews of historical financial information.

Some of the most popular assurance services performed by experts under the National Standards on Assurance Services are services provided under the following regulations:

• KSUA 3400 Audit of prospective financial information,
• KSUA 3402 Assurance reports on controls in a service organisation.

Assurance service other than financial auditing activities are specified in Article 136(2) of the Act on statutory auditors, audit firms and public supervision, and may only be performed after the audit committee has conducted an appropriate assessment of threats to independence and its safeguards.⁵

Assurance services other than financial auditing activities include, among others:

• conducting due dilligence of the economic and financial health of an organisation,
• verifying consolidation packages,
• confirming the fulfilment of the conditions of concluded loan agreements or other agreements related to financing, based on the analysis of financial information from the financial statements audited by the given audit firm or from interim financial statements,
• assurance services in the scope of reporting on corporate governance, risk management and corporate social responsibility.⁶

Assurance services also include related services, which consist in conducting agreed-upon procedures, for which the purpose, scope of work and the method of their performance have been specified. A description of the procedures performed (and their outcome) is then included in the report on the performance of the service.⁷

It is worth noting that as part of the agreed-upon procedures service, the auditor does not present an opinion, and the service itself does not include obtaining any assurance by the client. However, the report contains the findings gathered by the auditor regarding the financial information of the entity and – it should be remembered – it is not made publicly available. Both the procedures covered by the report and the entities authorised to become familiar with its content are determined in this case individually by the entity and the auditor.

The scope of some related services is specified by the National Standards on Related Services. These may include:

• National Standard on Related Services (Polish: KSUP) 4400 (Z) Agreed-upon procedures engagements related to financial information,
• National Standard on Related Services (KSUP) 4401 Agreed-upon procedures engagements related to securities transactions requiring the issuance of a prospectus,
• National Standard on Related Services (KSUP) 4410 (Z) Compilation services.

When to reach out to a statutory auditor for help?

Auditors support businesses in the course of various projects, but, what is important, the law also specifies the scope of the services whose provision by a statutory auditor has been banned. Under the Regulation (EU) No. 537/2014 of the European Parliament and the Council, statutory auditors are prohibited from providing, i.a., the following services:

• certain tax services,
• services that involve playing any part in the management or decision-making of the audited entity,
• bookkeeping and preparing accounting records and financial statements,
• certain legal services,
• designing and implementing internal control or risk management procedures related to the preparation and/or control of financial information or designing and implementing financial information technology systems,
• services related to the audited entity’s internal audit function.⁸

Whenever the assurance services of a statutory auditor are required or pursued, it would be advisable to turn to experienced and qualified specialists. The support of professionals in the area of international financial reviewing and assurance standards will ensure that the entire process is smooth and compliant with the requirements in place.

¹Article 2(7) of the Act on statutory auditors, audit firms and public supervision.

²Article 2(5) of the Act on statutory auditors, audit firms and public supervision.

³Article 223 of the Commercial Companies Code.

⁴Article 559(1) of the Commercial Companies Code.

⁵Article 136(3) of the Act on statutory auditors, audit firms and public supervision.

⁶Article 136(2) of the Act on statutory auditors, audit firms and public supervision.

⁷Article 2(6) of the Act on statutory auditors, audit firms and public supervision.

⁸Article 5 (1)(2) of the Consolidated text: Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC.