Introduction To Assurance

Question 1

Advantage of assurance to shareholder?

Answer 1

-Most of misstatements are identified
-identification of weakness in internal control
-assist in sale n purchase of business

Question 2

What happens if internal control is weak?

Answer 2

Inform to management by issuing management letter or letter of weakness

Question 3

What is modified and unmodified report?

Answer 3

Modified report is issued when there are misstatements in F/S.
Unmodified report is issued when true and fair view of F/S are presented.

Question 4

Levels of assurance

Answer 4

Limited/negative assurance 70%
Reasonable/positive assurance 95%
Absolute assurance ( cannot be given)

Question 5

Conclusion of reasonable assurance?

Answer 5

In our opinion, financial statements give true and fair view.

Question 6

Conclusion of limited assurance/review

Answer 6

Based on our review nothing has come to our attention that causes us to believe that f/s Dont give true and fair view