KCHAP 1-2-3

Which three of the following constitute possible subject matter which may be evaluated for the purposes of an assurance engagement?

• A Data

• B Systems or processes

• C Corporate governance

• D IFRS

Which two of the following describe the roles of the responsible party in any assurance engagement?

• A Setting the criteria of the assurance engagement

• B Gathering evidence on the subject matter

• C Issuing an opinion on the subject matter against the criteria set

• D Preparing the subject matter

Which one of the following describes the assurance provided and conclusion given in a reasonable assurance engagement?

• A Absolute and negative

• B High and negative

• C High and positive

• D Low and positive

Which three of the following statements form part of the generally accepted definition of 'fair', in the context of 'a true and fair view'?

• A The information is free from discrimination and bias.

• B The accounts have been correctly extracted from the company's books and records.

• C The information complies with generally accepted accounting practice.

• D The accounts reflect the commercial substance of the company's underlying transactions.

5 The following is an extract from an independent accountant's unmodified report on a profit forecast: "Based on our examination of the evidence supporting the assumptions, nothing has come to our attention which causes us to believe that these assumptions do not provide a reasonable basis for the forecast."

5.1 Which one of the following best describes the types of wording and of assurance provided by this statement?

• A High level of assurance expressed using a negative form of words

• B Limited level of assurance expressed using a negative form of words

• C Reasonable assurance expressed using a negative form of words

• D Negative assurance expressed using a positive form of words

6 With respect to the benefits of assurance engagements, for each of the following statements select whether they are true or false.

6.1 Assurance is an independent and professional activity that users value.

• A True

• B False

6.2 The principle objective of assurance is to detect and correct fraud.

• C True

• D False

6.3 Assurance assignments may take many forms.

• E True

• F False

7 The following are ways in which the assurance provider might be able to 'close' the expectations gap. For each, select whether it is true or false.

7.1 By issuing an engagement letter setting out the work to be carried out and its limitations:

• A True

• B False

7.2 By reducing the audit fee:

• C True

• D False