Assurance Services Flashcards
- Which of the following statements best describes assurance services?
A. Independent professional services that are intended to enhance the credibility of information to meet the needs of an intended user.
B. Services designed to express an opinion on the fairness of historical financial statements based on the results of an audit.
C. The preparation of financial statements or the collection, classification, and summarization of other financial information.
D. Services designed for the improvement of operations, resulting in better outcomes.
A. Independent professional services that are intended to enhance the credibility of information to meet the needs of an intended user.
- Which of the following is not an assurance service?
A. Examination of prospective financial information
B. Audit of historical financial statements
C. Review of financial statements
D. Compilation of financial information
D. Compilation of financial information
- 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?
A. Reliable criteria contribute to conclusions that are clear, comprehensive, and not subject to significantly different interpretations.
B. 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.
C. Neutral criteria contribute to conclusions that are free from bias.
D. Criteria are sufficiently complete when they contribute to conclusions that are clear, comprehensive, and not subject to different interpretations.
C. Neutral criteria contribute to conclusions that are free from bias.
- In an assurance engagement, the outcome of the evaluation or measurement of a subject matter against criteria is called
A. Subject matter information
B. Subject matter
C. Assurance
D. Conclusion
A. Subject matter information
- In some assurance engagements, the evaluation or measurement of the subject matter is performed by the responsible party, and the subject matter information is in the form of an assertion by the responsible party that is made available to intended users. These engagements are called
A. Direct reporting engagements
B. Assertion-based engagements
C. Non-assurance engagements
D. Recurring engagements
B. Assertion-based engagements
- What type of assurance engagement is involved when the practitioner expresses a positive form of conclusion?
A. Limited assurance engagement
B. Positive assurance engagement
C. Reasonable assurance engagement
D. Absolute assurance engagement
C. Reasonable assurance engagement
- What type of assurance engagement is involved when the practitioner expresses a negative form of conclusion?
A. Reasonable assurance engagement
B. Negative assurance engagement
C. Assertion-based assurance engagement
D. Limited assurance engagement
D. Limited assurance engagement
- Which of the following statements is true concerning evidence in an assurance engagement?
A. Sufficiency is the measure of the quantity of evidence.
B. Appropriateness is the measure of the quality of evidence, that is, its reliability and persuasiveness.
C. The reliability of evidence is influenced not by its nature but by its source.
D. Obtaining more evidence may compensate for its poor quality.
A. Sufficiency is the measure of the quantity of evidence
- Assurance engagement risk is the risk
A. That the practitioner expresses an inappropriate conclusion when the subject matter information is materially misstated.
B. Of expressing an inappropriate conclusion when the subject matter information is not materially misstated.
C. Through loss from litigation, adverse publicity, or other events arising in connection with a subject matter reported on.
D. Of expressing an inappropriate conclusion when the subject matter information is either materially misstated or not materially misstated.
A. That the practitioner expresses an inappropriate conclusion when the subject matter information is materially misstated.
- Reducing assurance engagement risk to zero is very rarely attainable or cost beneficial as a result of the following factors, except
A. The use of selective testing.
B. The fact that much of the evidence available to the practitioner is persuasive rather than conclusive.
C. The practitioner may not have the required assurance knowledge and skills to gather and evaluate evidence.
D. The use of judgment in gathering and evaluating evidence and forming conclusions based on that evidence.
C. The practitioner may not have the required assurance knowledge and skills to gather and evaluate evidence.
- The Philippine Framework for Assurance Engagements
A. Contains basic principles, essential procedures, and related guidance for the performance of assurance engagements.
B. Defines and describes the elements and objectives of an assurance engagement, and identifies engagements to which PSAs, PSREs, and PSAEs apply.
C. Provides a frame of reference for CPAs in public practice when performing audits, reviews, and compilations of historical financial information.
D. Establishes standards and provides procedural requirements for the performance of assurance engagements.
B. Defines and describes the elements and objectives of an assurance engagement, and identifies engagements to which PSAs, PSREs, and PSAEs apply.
- After accepting an assurance engagement, a practitioner is not allowed to change the engagement to a non-assurance engagement, or from a reasonable assurance engagement to a limited assurance engagement, except when there is reasonable justification for the change. Which of the following ordinarily will justify a request for a change in the engagement?
I. A change in circumstances that affects the intended users’ requirements.
II. A misunderstanding concerning the nature of the engagement.
A. I only C. Both I and II
B. II only D. Neither I nor II
C. Both I and II
