Fundamentals of Auditing & Assurance Services

For assurance engagements regarding historical financial information, reasonable assurance engagement is called

• Audit

• Reviews

• Compilations

• Examinations

Which of the following forms may be the subject matter of an assurance engagement take?

• Historical Financial Information

• Systems and Processes

• Behavior

• All of the above

Which of the following best describes the objective of an assurance engagement?

• To compare the company’s information and policies to those of other entities

• To enhance the credibility of information in order to improve likelihood that the information will meet the needs of an intended user

• To improve the company’s outcomes

• All of the above

Which of the statements about assurance engagement is not correct?

• Assurance Engagements are intended to enhance the credibility of information about a subject matter

• The subject matter of an assurance engagement may take forms such as data, systems, and processes or behavior

• Not all engagements performed by professional accountants are assurance engagement

• The Philippines Standards on Assurance Engagements issued by AASC describe the objectives and elements of assurance engagements to provide high, moderate or low level of assurance

Suitable criteria are required for reasonably consistent evaluation or measurement of the subject matter of an assurance engagement. Which of the following statements concerning the characteristics of suitable criteria is correct?

• Criteria are sufficiently complete when they contribute to conclusions that are clear, comprehensive, and not subject to different interpretations

• Relevant criteria allow reasonably consistent evaluation or measurement of the subject matter including, where relevant, presentation and disclosure, when used in similar circumstances by similarly qualified practitioners

• Reliable criteria contribute to conclusions that are clear, comprehensive, and not subject to significantly different interpretations

• Neutral criteria to contribute to conclusions that are free from bias.

Which of the following is not an assurance engagement?

• Compilation

• Financial Statements Audit

• Information Reliability services

• Reviews of prospective financial statements

An assurance engagement that provides a high level of assurance that the financial statements are free from of material misstatements is known as?

• Review

• Independent Financial Statements Audit

• Information Reliability Services

• Agreed-upon procedures

Which statement does not accurately describe an assurance engagement?

• The objective of an assurance engagement is for a professional accountant to evaluate or measure a subject matter that is the responsibility of another party against identified suitable criteria, and to express a conclusion that provides the intended user with a level of assurance about that subject matter.

• Not all engagements performed by professional accountants are assurance engagements

• A particular engagement, to be an assurance engagement, depends upon whether it exhibits all the following elements: a two- party relationship, a subject matter, suitable criteria, and a conclusion

• An engagement in form of agreed-upon procedures result in the expression of factual findings

A practitioner should plan and conduct the assurance engagement in an effective manner to meet the objective of the engagement. Which of the following matters need not to be a concern in planning the work?

• Criteria to be used

• Engagement objective

• Personnel and expertise requirements

• Specific format of the assurance report

In some assurance engagements, the evaluation measurement of the subject matter is performed by the responsible party, and the subject matter is in the form of an assertion by the responsible party that is made available to intended users. These engagements are called

• Direct reporting engagements

• Assertion-based engagements

• Non-assurance engagements

• Recurring Engagements