Fundamentals Principles of Assurance Services Flashcards
[True/False]
Assurance services help enhance the reliability of financial information throughout the capital markets.
True
[True/False]
Assurance refers to the practitioner’s contentment that the information made by an entity is reliable.
True
[True/False]
Assurance services refers to engagements in which a practitioner expresses a conclusion designed to enhance the degree of confidence of the practitioner about the outcome of evaluation of a subject matter.
False, to enhance the degree of confidence of the INTENDED USERS.
[True/False]
The practitioner must be independent to the responsible party and to the public.
True
[True/False]
The responsible party may not be from the same organization with the intended users but may be one of the intended users.
True
[True/False]
The intended users must have at least one responsible party to constitute as an assurance engagement.
False, assurance engagement requires a three-party relationship: the practitioner, the responsible party, and the intended users
[True/False]
Subject matter information relates to the nature of assertion with which the practitioner gathers sufficient evidence.
True
[True/False]
A subject matter is considered appropriate if it can be subject to audit procedures on a test basis.
False, an appropriate subject matter can be subject to audit procedures on a test basis AND identifiable, and capable of consistent evaluation or measurement against the identified criteria
[True/False]
The criteria serve as the yardstick to measure or evaluate the subject matter.
True
[True/False]
The criteria used to evaluate a subject matter must be included in any document that contains the assurance report issued on such subject matter.
True
[True/False]
Sufficiency and appropriateness of evidence are interrelated factors and, as such, are considered complements.
True
[True/False]
The determination of materiality is a mathematical exercise which is a vital process in planning the nature, timing and extent of assurance engagement procedures.
False, the auditor’s determination of materiality is a matter of PROFESSIONAL JUDGMENT
[True/False]
Inherent risk refers to the susceptibility of the subject matter information to misstatements before consideration of controls.
True
[True/False]
A practitioner may consider a procedure not applicable if it would entail high level of costs to the assurance service.
False, high level of costs is NOT a valid basis for omitting an evidence gathering procedures.
The practitioner may:
a) identify and perform alternative procedures that can minimize the cost; or
b) in the absence of alternative procedures, the practitioner is still required to perform the procedures as long as he believes that it is necessary and beneficial to the entire engagement
[True/False]
The more the practitioner intends to exhibit the attitude of professional skepticism, the more engagement procedures will be required.
True
[True/False]
A practitioner is not expected to be an expert in the verification of authenticity of documentation of audit evidences.
False, he is expected to be an expert in the verification of authenticity of documentation of audit evidences
[True/False]
Generally, evidence that is generated internally is more reliable than those from independent sources when the related controls are effective.
True
[True/False]
Only limited procedures are performed by the practitioner on limited assurance engagements as a basis for a negative form of conclusion.
True
[True/False]
Audits and reviews are assurance-based engagements as both the subject matter information and the practitioner’s assurance report are available to the intended users.
True
[True/False]
The three-party relationship still exists in non-assurance engagements which includes the practitioner, the responsible party and the public.
False, there’s only a TWO-PARTY RELATIONSHIP which includes the practitioner and the responsible party
[True/False]
IAASB sets high-quality international standards for assurance engagements and enhances quality control that promote public confidence to the accountancy profession.
True
[True/False]
Engagement standards are issued to provide interpretative guidance and practical assistance to professional accountants that promote good practice in performing assurance engagements.
False, it is the PRACTICE STATEMENTS, not the engagement standards
[True/False]
The report issued on non-assurance engagements must be expressed in a negative form.
False, the report is issued whether negative form OR other form of assurance
[True/False]
Procedures to be done in performing audits and reviews are exclusively determined by the auditor.
True
[True/False]
Only a moderate level of assurance is provided in management advisory services.
False, there’s no assurance on management advisory services
Assurance engagement
A) is an engagement in which a practitioner is engaged to issue, or does issue, a written communication that expresses a conclusion about the reliability of a written assertion that is the responsibility of another party.
B) is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users.
C) is an engagement in which the auditor provides a moderate level of assurance that the information subject to the engagement is free of material misstatement
D) is an engagement intended to enhance the credibility of information about a subject matter by evaluating whether the subject matter conforms in all material respects with suitable criteria, thereby improving the likelihood that the information will meet the needs of an intended user.
D) is an engagement intended to enhance the credibility of information about a subject matter by evaluating whether the subject matter conforms in all material respects with suitable criteria, thereby improving the likelihood that the information will meet the needs of an intended user.
Assurance services can be best described as
A) engagement designed to enable an independent practitioner to express an opinion as to the fairness of historical financial information.
B) processes that measures and communications financial data to intended users.
C) independent professional services intended to enhance the credibility of information to meet the needs of an intended user.
D) is broader than attestation but lesser in scope than audit.
C) independent professional services intended to enhance the credibility of information to meet the needs of an intended user.
Assurance engagement include the following, except
A) an engagement conducted to provide a high level of assurance that the subject matter conforms in all material respects with identified suitable criteria.
B) an engagement conducted to provide a moderate level of assurance that the subject matter is plausible in the circumstances.
C) an engagement in accordance with the Philippine Standard on Assurance Engagement(s) issued by the Philippine Auditing Standards and Practices Council as approved by the Board of Accountancy/Professional Regulation Commission.
D) an engagement to perform agreed-upon procedures.
D) an engagement to perform agreed-upon procedures.
The three types of attestation services are
A) audits, review, and compilations
B) audits, compilations, and other attestation services
C) reviews, compilations, and other attestation services
D) audits, reviews, and other attestation services
D) audits, reviews, and other attestation services
Which of the following is not an assurance engagement?
A) Audit of prospective financial statements
B) Review of interim historical financial statements
C) Comprehensive audit
D) Preparation of tax returns that use estimates
D) Preparation of tax returns that use estimates
The single feature that most clearly distinguishes auditing, attestation, and assurance is
A) type of service
B) scope of service
C) CPA’s approach to the service
D) training required to perform the service
B) scope of service
Unlike consulting services, assurance services
A) make recommendations to management
B) report on how to use information
C) report on quality information
D) are two-party contracts
C) report on quality information
All, except one, are elements of an assurance engagement.
A) Subject matter
B) Written report
C) Sufficient appropriate evidence
D) Independence
D) Independence
In a financial statement audit, which is not an element of assurance engagement?
A) Independent auditor, audit client management, audit client shareholders and/or directors
B) Philippine Standards on Auditing
C) Independent auditor’s report
D) Financial statements and the assertions
B) Philippine Standards on Auditing
Which of the following is not included in the three-party relationship in an assurance engagement?
A) Auditor
B) Practitioner
C) Responsible party
D) Intended users
A) Auditor
Which of the following is not a suitable criterion in the context of audit?
A) PSA
B) IFRS
C) GAAP
D) PFRS for SMEs
A) PSA
Characteristics of suitable criteria do not include
A) relevance
B) neutrality
C) comparability
D) understandability
C) comparability
One of the elements of an assurance engagement is appropriate subject matter. For the subject matter to be considered appropriate, it
I. should be identifiable, and capable of consistent evaluation or measurement against the identified criteria
II. can be subjected to procedures for gathering sufficient appropriate evidence to support a reasonable assurance or limited assurance conclusion, as appropriate
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
“Subject matter information” as used in the Framework to Assurance Engagement shall mean
A) the subject which is to be measured against suitable criteria
B) outcome of the evaluation or measurement of a subject matter
C) the assertion of the subject party
D) any data relating to the subject matter to be measured against the criteria
B) outcome of the evaluation or measurement of a subject matter
Which of the following can be subject matter?
A) Financial and non-financial performance or condition
B) Behavior
C) Physical characteristics (e.g. capacity)
D) All of the above can be subject matter
D) All of the above can be subject matter
Criteria that are embodied in laws or regulations or issued by authorized bodies of expert are called
A) legal criteria
B) suitable criteria
C) established criteria
D) specifically-developed criteria
C) established criteria
The measure of the quality of evidence.
A) Appropriateness
B) Sufficiency
C) Relevance
D) Reliability
A) Appropriateness
The measure of the quantity of evidence.
A) Appropriateness
B) Sufficiency
C) Relevance
D) Reliability
B) Sufficiency
It refers to the level of auditor’s satisfaction as to the reliability of an assertion being made by one party for use by another party.
A) Confidence level
B) Assurance level
C) Reliability level
D) Tolerable level
B) Assurance level
Which of the following is not a component of engagement risk?
A) Control risk
B) Inherent risk
C) Business risk
D) Detection risk
C) Business risk
The form of conclusion in an assurance engagement are
A) positive and negative
B) high, medium, low
C) high and low
D) reasonable and limited
A) positive and negative
The two levels of conclusion in an assurance engagement are
A) positive and negative
B) high, medium, low
C) high and low
D) reasonable and limited
C) high and low
These refers to assurance engagements in which 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 the intended users.
A) Assertion-based engagement
B) Direct reporting engagement
C) Indirect reporting engagement
D) Reasonable assurance engagement
A) Assertion-based engagement
These refers to assurance engagements in which the practitioner either directly performs the evaluation or measurement of the subject matter, or obtains a representation from the responsible party that has performed the evaluation or measurement that is not available to the intended users.
A) Assertion-based engagement
B) Direct reporting engagement
C) Indirect reporting engagement
D) Reasonable assurance engagement
B) Direct reporting engagement
Agreed-upon procedures engagement provides what level of assurance?
A) None
B) Absolute
C) High
D) Moderate
A) None
Practitioner who perform assurance engagements is governed by the following, except
A) The Framework to Assurance Engagements
B) Code of Ethics for Professional Accountants in the Philippines
C) Philippine Standards on Quality Control
D) Philippine Financial Reporting Standards
D) Philippine Financial Reporting Standards
An engagement conducted to provide
(a) a high level of assurance that the subject matter conforms in all material respects with identified suitable criteria; or
(b) a moderate level of assurance that the subject matter is plausible in the circumstances
A) Audit engagement
B) Review engagement
C) Reasonable assurance
D) Assurance engagement
D) Assurance engagement
Assurance service engagements
A) do not require independence
B) require application of all attestation standards and GAAS
C) are performed currently without professional standards
D) do not require evidence
B) require application of all attestation standards and GAAS
Which of the following may be under the scope of the Framework for Assurance Engagement?
A) Agreed-upon procedures engagements and compilation of financial and other information
B) Preparation of tax returns where no conclusion conveying assurance is expressed
C) Consulting (or advisory) engagements, such as management and tax consulting
D) Preparation of tax returns where a conclusion conveying assurance is expressed
A) Agreed-upon procedures engagements and compilation of financial and other information
Which of the following is incorrect regarding the “three-party relationship” element of assurance engagements?
A) Professional accountants are those persons who are members of an IFAC member body, who should be in public practice.
B) The responsible party and the intended user will often be from separate organizations but need not be.
C) The responsible party is the person or persons, either as individuals or representatives of an entity, responsible for the subject matter.
D) The intended user is the person or class of persons for whom the professional accountant prepares the report for a specific use or purpose.
A) Professional accountants are those persons who are members of an IFAC member body, who should be in public practice.
Which of the following is incorrect regarding practitioner?
A) The term practitioner is broader than the term auditor.
B) The practitioner is governed by ethical requirements (i.e. professional competence) regarding the conduct of the engagements.
C) The practitioner must be independent to the responsible party but not necessarily to the intended users.
D) The practitioner is responsible for determining the nature, timing or extent of procedures required by the management.
C) The practitioner must be independent to the responsible party but not necessarily to the intended users.
Which is incorrect regarding the responsible party?
A) The responsible party and the intended party should not be from the same entity.
B) The responsible party may be one of the intended users and may or may not be the engaging party.
C) The responsible party ordinarily provides the practitioner with a written representation.
D) The responsible party may be responsible for the subject matter information and may also be responsible for the subject matter.
A) The responsible party and the intended party should not be from the same entity.
The Framework of Philippine Standards on Auditing provides that financial statements needed to be prepared in accordance with one, or a combination of the following, except
A) accounting standards generally accepted in the Philippines
B) Philippine Accounting Standards
C) another authoritative and comprehensive financial reporting framework designed for use in financial reporting and is identified in the financial statements
D) accounting standards developed by the accountant of the business enterprise herself/himself
D) accounting standards developed by the accountant of the business enterprise herself/himself
The following relates to intended users, choose the exception.
A) Intended users are the person/s for whom the practitioner prepares the assurance report.
B) Intended users may be identified by agreement between the practitioner and the responsible party or engaging party, or by law.
C) Intended users may include either practitioner or the responsible party.
D) In case broad range of interests by the readers of assurance report, intended user may be limited to major stockholders with significant and common interests.
C) Intended users may include either practitioner or the responsible party.
The following cannot be a suitable criterion for an assurance engagement, except?
A) Practitioner’s own expectations
B) Practitioner’s judgment
C) Practitioner’s experience
D) Agreement between the responsible party and the intended users
B) Practitioner’s judgment
According to the framework for assurance engagement, the criteria must be
A) sufficient and appropriate
B) sufficient or appropriate
C) suitable and available to intended users
D) suitable or available to intended users
C) suitable and available to intended users
The following factors could affect the quantity and quality of available evidence that are attributable to the circumstance of the engagement. Which is the exception?
A) The fact that the subject matter information is prospective.
B) The timing of the practitioner’s appointment.
C) An entity’s document retention policy.
D) Restriction imposed by the responsible party.
A) The fact that the subject matter information is prospective.
Which is incorrect concerning evidence?
A) The higher the risk of material misstatement is involved, the more is required.
B) The better the quality, the less is required.
C) The volume of evidence can compensate for its poor quality.
D) The reliability of evidence is influenced by its source and its nature.
C) The volume of evidence can compensate for its poor quality.
Select the incorrect statement from the following generalization on the reliability of evidence.
A) Evidence is more reliable when it is obtained from independent sources outside the entity.
B) Evidence that is generated internally is more reliable when the related controls are effective.
C) Evidence obtained directly by the practitioner is more reliable than when obtained indirectly, even if the source is not competent.
D) Evidence provided by original documents is more reliable than evidence provided by photocopies or facsimiles.
C) Evidence obtained directly by the practitioner is more reliable than when obtained indirectly, even if the source is not competent.
Which is incorrect?
A) Consistent evidence obtained from various sources or of different nature is more reliable.
B) It is generally more difficult to obtain assurance about subject matter information at a point in time than subject matter information covering a period of time.
C) When it is cost prohibitive or difficult to obtain an evidence, the auditor may shift to obtain from other alternatives.
D) The practitioner considers the relationship between cost of obtaining the evidence and the usefulness of the information.
B) It is generally more difficult to obtain assurance about subject matter information at a point in time than subject matter information covering a period of time.
Which is correct concerning the concept of professional skepticism?
A) An assumption that the responsible party is dishonest.
B) A critical assessment, with a questioning mind on the validity of evidence obtained.
C) An assumption that responsible party is trustworthy.
D) Disregarding contradicting information against several of consistent evidence.
B) A critical assessment, with a questioning mind on the validity of evidence obtained.
Which of the following statements is false regarding the consideration of materiality?
A) It is taken into consideration in the context of both qualitative and quantitative factors.
B) It is matter of professional judgment.
C) It requires understanding and assessment of the factors that might influence the decision of the intended users.
D) It is defined as a certain percentage (e.g., 5% of total asset, 1% of gross sales)
D) It is defined as a certain percentage (e.g., 5% of total asset, 1% of gross sales)
When the professional accountant has obtained sufficient appropriate evidence to conclude that the subject matter conforms in all material respects with identifies suitable criteria, he can provide
A) moderate level of assurance
B) high level of assurance
C) absolute assurance
D) no assurance
B) high level of assurance
Which of the fundamental principles in the Code of Ethics are required in the performance of non-assurance engagements?
I. Professional competence and due care
II. Independence
III. Confidentiality
A) I and II only
B) I and III only
C) II and III only
D) I, II and III
B) I and III only
In an agreed-upon engagement, which of the following statements is incorrect?
A) Management, the auditor and any appropriate third-party user agree on the procedures to be performed.
B) Although procedures required are of an audit nature, independence is not required.
C) No assurance is rendered in the report.
D) The report is provided to a wide range of users for decision making.
D) The report is provided to a wide range of users for decision making.
Evidence is more reliable when it is obtained from
A) internal sources within the entity
B) independent sources outside of the entity
C) internal sources outside of the entity
D) independent sources inside the entity
B) independent sources outside of the entity
Which of the following primarily refers to the relevance and reliability of evidence?
A) Sufficiency
B) Adequacy
C) Appropriateness
D) Suitability
C) Appropriateness
A professional accountant is required to be independent in which of the following engagements?
I. Audit of historical financial information
II. Review of historical financial information
III. Agreed-Upon Procedures
A. I only
B) I and II only
C) II and III only
D) I, II, and III
B) I and II only
Which of the following statements is/are correct?
I. Audit is an assurance engagement while review is not.
II. More procedures are performed by a practitioner in a review than in an audit.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
D) Neither I nor II
Which of the following is true about assurance services?
A) All assurance services are financial statement audits.
B) An assurance engagement must have five fundamental elements.
C) A fundamental element for an assurance engagement is engagement fee.
D) A review of historical financial statements is not an assurance service.
B) An assurance engagement must have five fundamental elements.
Which of the following statements is/are correct?
I. Responsible parties and intended users may be from the same entity.
II. Responsible parties and intended users may be from the different entities.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The _____ is the outcome of the evaluation or measurement of a/an ______.
A) subject matter; subject matter information
B) subject matter information; subject matter
C) subject matter; evidence
D) evidence; subject matter
B) subject matter information; subject matter
Classify the following subject matter.
I. Internal controls
II. Facility capacity
A) Physical characteristics, systems and processes
B) Systems and processes, physical characteristics
C) Behavior, physical characteristics
D) Physical characteristics, behavior
B) Systems and processes, physical characteristics
Which of the following statements is/are correct?
I. Reliability of evidence is influence by its source and nature
II. Generalizations about reliability of evidence can be made without exceptions
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
Which of the following types of evidence is most reliable?
A) Original copy of the Omnibus Loan and Credit Agreement
B) Photocopy of the Omnibus Loan and Credit Agreement
C) Scanned copy of the Omnibus Loan and Credit Agreement
D) Faxed copy of the Omnibus Loan and Credit Agreement
A) Original copy of the Omnibus Loan and Credit Agreement
_____ is obtained from consistent evidence from different sources or of a different nature than from items or evidence considered individually.
A) More assurance
B) Less assurance
C) No assurance
D) Little assurance
A) More assurance
Which of the following is an example of a formal criterion(a)?
I. Philippine Public Sector Accounting Standards
II. Number of times a committee meets in a year
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
Which refers to reliability of criteria?
A) Contribute to conclusions that assist decision making by users.
B) Allow reasonably consistent evaluation or measurement of subject matter.
C) Contribute to conclusions that are clear, comprehensive, and not subject to significantly different interpretations.
D) Contribute to conclusions that are free from bias.
B) Allow reasonably consistent evaluation or measurement of subject matter.
Which is true about assurance engagement risk?
A) It is more specific than audit risk, since it encompasses audits, reviews and compilation.
B) It is wider in scope than audit risk, since it encompasses audits, reviews and other assurance engagements.
C) It is more specific than audit risk, since it encompasses audits, reviews and other assurance engagements.
D) It is wider in scope than audit risk, since it encompasses audits, reviews and compilations.
B) It is wider in scope than audit risk, since it encompasses audits, reviews and other assurance engagements.
Evaluate the following statement as to (1) level of assurance and (2) form of conclusion.
“In our opinion, internal control is effective, in all material respects, based on the COSO Framework.”
A) (1) positive; (2) reasonable
B) (1) reasonable; (2) positive
C) (1) negative; (2) limited
D) (1) absolute; (2) positive
B) (1) reasonable; (2) positive
Which of the following statements is/are incorrect?
I. Financial statements audit are assurance services.
II. Review of historical financial statements are assurance services.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
D) Neither I nor II
Which of the following is a distinguishing characteristic of attest engagements over direct reporting engagements?
A) Assertions
B) Assurance
C) Written report
D) Independence of the practitioner
A) Assertions
Who is responsible for determining the nature, timing, extents of assurance procedures?
A) Practitioner
B) Practitioner and Responsible Party
C) Practitioner and Intended User
D) Practitioner, Responsible Party, and Intended User
A) Practitioner
Which of the following statements is/are correct?
I. Whenever practical, the assurance report is addressed to all the intended users.
II. In certain cases, intended users may be limited to major stakeholders with significant and common interests.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
Which of the following statements best describes the logical relationship among audits, attest engagements, and assurance engagements?
A) All attest engagements are audits, but not all audits involve attestation.
B) All assurance engagements, including review, involve attestation.
C) An audit provides assurance, but does not involve attestation.
D) All audits are attest engagements, but not all attest engagements are audit.
D) All audits are attest engagements, but not all attest engagements are audit.
Which of the following statements is incorrect?
A) Intended users refer to the person, persons, or class of persons for whom the practitioner prepared the assurance report.
B) Responsible party pertains to the person or persons who in a direct reporting engagement, is responsible for the subject matter; or in an assertion-based engagement, is responsible for the subject matter information (the assertion), and may be responsible for the subject matter.
C) Criteria represent the benchmarks used to evaluate or measure the subject matter, including where relevant, benchmarks for presentation and disclosure.
D) Assertions pertain to all information gathered by the practitioner in evaluating the subject matter against criteria, on which the conclusion is based.
D) Assertions pertain to all information gathered by the practitioner in evaluating the subject matter against criteria, on which the conclusion is based.
Which of the following procedures ordinarily performed during an audit also performed in a review engagement?
A) Assessment of accounting and internal controls
B) Tests of controls
C) Tests of records and responses to inquiries
D) Inquiry and analytical procedures
D) Inquiry and analytical procedures
Assurance engagements may be classified according to (1) level of assurance being provided and (2) structure of the assurance engagement. Classify the following assurance engagements as to either (1) as to level of assurance or (2) as to structure.
I. Reasonable assurance engagement
II. Limited assurance engagement
III. Attestation engagement
IV. Direct reporting engagement
A) (1) I and III; (2) II and IV
B) (1) I and II; (2) III and IV
C) (1) III and IV; (2) I and II
D) (1) II and IV; (2) I and III
B) (1) I and II; (2) III and IV
These are representations by management, explicit or otherwise, that are embodied in the financial statements.
A) Assertions
B) Criteria
C) Evidence
D) PSAs
B) Criteria
It refers to the risk that a practitioner would express an inappropriate conclusion when the subject matter information is materially misstated.
A) Information risk
B) Assurance engagement risk
C) Risk of material misstatement
D) Audit risk
B) Assurance engagement risk
Which of the following is an example of an assurance engagement providing limited assurance?
A) An engagement to express an opinion whether the financial statements are prepared in all material respects, in accordance with an identified financial reporting framework.
B) An engagement, to state whether, on the basis of procedures which do not provide all the evidence that would be required in an audit, anything has come to the practitioner’s attention that causes the practitioner to believe that the financial statements are not prepared in all material respects, in accordance with an identified financial reporting framework.
C) An engagement to carry out those procedures of an audit nature to which the auditor and the entity and any appropriate third parties have agreed and to report on factual findings.
D) An engagement to use accounting expertise as opposed to auditing expertise to collect, classify and summarize financial information.
B) An engagement, to state whether, on the basis of procedures which do not provide all the evidence that would be required in an audit, anything has come to the practitioner’s attention that causes the practitioner to believe that the financial statements are not prepared in all material respects, in accordance with an identified financial reporting framework.
The practitioner’s independence is not required in which of the following engagements?
A) Audit of historical financial statements
B) Review of historical financial statements
C) Examination of prospective financial statements
D) Installation of accounting information systems
D) Installation of accounting information systems
An engagement is classified as a limited assurance engagement if
A) the objective is a reduction in assurance engagement risk to an acceptably low level as the basis for a positive form of expression of the practitioner’s conclusion.
B) the objective is a reduction in assurance engagement risk to a level that is acceptable in the circumstances of the engagement, but where that risk is greater than for a reasonable assurance engagement, as the basis for a negative form of expression of the practitioner’s conclusion.
C) the evaluation or measurement of the subject matter is performed by the responsible party, and the subject matter information is in the form of assertion by the responsible party that is made available to the intended users.
D) the practitioner either directly performs the evaluation or measurement of the subject matter, or obtains a representation from the responsible party that has performed the evaluation or measurement that is not available to the intended users. The subject matter information is provided to the intended users in the assurance report.
B) the objective is a reduction in assurance engagement risk to a level that is acceptable in the circumstances of the engagement, but where that risk is greater than for a reasonable assurance engagement, as the basis for a negative form of expression of the practitioner’s conclusion.
Which of the following is most likely a form a conclusion for a reasonable assurance engagement?
A) “In our opinion, internal control is effective, in all material respects, based on XYZ criteria.”
B) “Based on our work described in this report, nothing has come to our attention that causes us to believe that internal control is not effective, in all material respects, based on XYZ criteria.”
C) Both A and B
D) Neither A nor B
A) “In our opinion, internal control is effective, in all material respects, based on XYZ criteria.”
Which of the following engagements is not covered by the pronouncements of AASC (Auditing and Assurance Standards Council)?
A) Audit and review engagements
B) Agreed-upon procedures engagements
C) Compilation engagements
D) Tax consulting engagements
D) Tax consulting engagements
