Final answer:
The correct answer is that auditing is a type of assurance service. Assurance services improve information quality for decision makers, with auditing being a systematic examination of financial records, and attest services being a broader category of assurance where reliability of third party's assertion is certified.
Step-by-step explanation:
The question asks which statement best describes the relationship among auditing, attest, and assurance services. The correct answer is D) Auditing is a type of assurance service. Auditing involves the systematic examination and verification of a company's financial records and is a subset of assurance services. Assurance services are independent professional services that improve the quality of information, or its context, for decision makers. Attest services refer to a subset of assurance services where the CPA attests to the reliability of a third party's assertion. This means attest services are broader than auditing but also fall under the umbrella of assurance services.
To provide an example, imagine a company that needs to show its financial statements correctly reflect its financial position. An auditor provides an auditing service by examining the financial statements to express an opinion on their accuracy, which is a form of assurance to stakeholders that the statements are reliable. If the auditor provides a report attesting to management's assertion that the financial statements are fair, this would be considered both an attestation and an auditing service.