Final answer:
Assurance services are broader in scope than auditing services, covering not just the reliability but also the relevance and timeliness of information. Auditing is a subset of assurance focused on the validity of financial statements, whereas assurance improves the overall quality and transparency of information for better decision-making.
Step-by-step explanation:
Assurance services differ from auditing services primarily in scope and purpose. Auditing services are specific types of assurance services that focus on the reliability and validity of financial statements. Auditing typically culminates in a report that expresses a professional opinion on whether the financial statements of a company present a true and fair view of the company's financial performance and position.
On the other hand, assurance services encompass a broader category of services where a CPA or equivalent provides an independent evaluation to improve the quality and transparency of information, so decision-makers can make more informed decisions. For example, assurance services can expand to evaluate the relevance, timeliness, and other qualities of information, not just its reliability. Therefore, assurance services are designed to improve the quality of information, or the context in which the information is used, which can be significantly broader than the traditional financial statement audit.
Guarantees, warranties, and service contracts provided by sellers are practical examples of assurance in a commercial setting. Despite these being more in the realm of customer service, they reflect the underlying principle of assurance—enhancing the confidence of stakeholders in the information or product provided by a business.