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Due diligence is a specific example of a direct reporting assurance engagement
DIRECT reporting assurance engagement?
What does that mean?In a direct (direct reporting) engagement, the responsible party does not present the subject matter information in a report in a direct engagement. Instead the practitioner reports directly on the subject matter and provides the intended users with an assurance report containing the subject matter information.
This is exactly what was written on google…but i didnt understand..
Does it mean the subject matter is not included in the report??
Can you pls explainLet’s try a different approach – the alternative to “direct reporting” is “attestation”.
In “attestation”, the responsible party makes assertions about the subject matter – e.g. in an audit, the directors (responsible party) assert that the FS (subject matter) “fairly presents”.
The practitioner’s role is to affirm the assertion(s) – so the audit expresses an opinion on whether the FS are fairly presented.However, the nature of due diligence is that the practitioner is directly reporting (e.g. to the directors of the potential acquirer) on the subject relating to the target.
So what i get from your statement..(maybe I’m wrong…if yes kindly correct)
In an audit, the directors provide the subject matter and the auditor confirms the validity of it
Whereas in DDR, the practitioner( auditor) directly reports on the subject matter to management…ie management does not present the subject matter to auditor?Kindly confirm
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