Fundamentals of Assurance Services Flashcards
Auditor’s satisfaction as to reliability of an assertion being made by one party for use by another party.
a. Confidence
b. Assurance
c. Credibility
d. Skepticism
b.
Assurance engagements differs from non-assurance engagements in that the latter:
a. is a 3-party contract
b. should be provided by an independent professional
c. designed to provide comments, suggestions, or recommendations on how to use the information
d. includes review as one of its engagements
c.
Which of the following is not an element of assurance engagement?
a. Criteria suitable for the engagement
b. Three party relationship involving a practitioner, a responsible party, and management
c. Sufficient appropriate evidence
d. Yields a written assurance report
b.
Three-party relationship: practitioner, responsible party, and intended users.
Management is an intended user, but management isn’t just the ONLY intended user.
True or false: the responsible party may be one of the intended users.
True
Statement I - The term auditor is broader than practitioner
Statement II - The practitioner’s independence diminishes when he uses the work of experts
Which of the statements above are true?
a. Statement I
b. Statement II
c. Both statements I and II
d. Neither I nor II
d.
The responsible party (choose the true statement):
I - must be the engaging party to the practitioner
II - is the person/s responsible for the subject
III - Should not be the intended user
a. I
b. II
c. III
d. I and II
b.
When the subject matter is performance of an entity, what is the subject matter information?
a. Key indicators of efficiency and effectiveness
b. Statement of compliance
c. Statement of effectiveness
d. Specifications document
a.
This characteristic of suitable criteria states that this allow reasonably consistent evaluation or measurement of the subject matter.
a. Relevance
b. Reliability
c. Completeness
d. Understandability
b.
This contributes to conclusions that are clear, comprehensive, and not subject to significantly different interpretations.
a. Neutrality
b. Relevance
c. Reliability
d. Understandability
d.
________ is the measure of quality of evidence, ________ is the measure of quantity of evidence.
a. Appropriateness, appropriateness
b. Sufficiency, sufficiency
c. Sufficiency, appropriateness
d. Appropriateness, sufficiency
d.
Risk that practitioner expresses an inappropriate conclusion when the subject matter information is materially misstated is __________ risk.
a. Inherent
b. Control
c. Assurance engagement
d. Business
c.
Risk that material misstatement that could occur will not be prevented, or detected and corrected on a timely basis by internal controls.
a. Detection risk
b. Inherent risk
c. Control risk
d. Business risk
c.
True or false: evidence that is generated internally is less reliable provided the related controls are effective.
False
Evidence that is generated internally is more reliable when the related controls are effective
True or false: Observation of how a control is applied is more reliable than inquiry about the application of a control
True
This opinion uses the phrase, “We do not express a conclusion”
a. Disclaimer of opinion
b. Qualified
c. Adverse
d. Modified
a.
