Week 9 - Other Assurance Engagements

Question 1

steps of an engagement?

Answer 1

acceptance
planning
evidence
conclusion / reporting

Question 2

what standards govern other assurance engagements?

Answer 2

either ISAE’s
or ISRE’s

Question 3

regarding assumptions used in a forecast, what is an auditor trying to ascertain?

Answer 3

reasonableness

financial info is prepared on a consistent basis with assumptions

Question 4

who’s responsible for preparing prospective financial information / forecasts?

Answer 4

management

Question 5

procedures for forecasts?

Answer 5

• consider management’s competence
• assess the reasonableness of assumptions
• check mathematical accuracy
• check forecasts have been prepared on the basis of these assumptions
• seek written reps regarding completeness, acceptance of responsibility, intended use of forecast etc

Question 6

wording for assurance on an other assurance engagement?

Answer 6

‘nothing has come to our attention…’

limited assurance is given negatively/bearishly

Question 7

how is negligence reduced for auditors in other assurance engagements?

Answer 7

clarify that actual results are likely to be different from the forecast

to reduce the expectations gap

Question 8

if presentation/disclosure of prospective financial information isn’t adequate…

Answer 8

issue qualified / adverse conclusion

Question 9

if one or more significant assumptions do not provide a reasonable basis for the prospective financial information…

Answer 9

adverse conclusion is given

Question 10

if there’s a limitation on scope for an other assurance engagement…

Answer 10

disclaimer of opinion / conclusionw

Question 11

what two things are we giving an opinion on regarding other assurance engagements?

Answer 11

• reasonableness
• correct preparation

Question 12

if forecast is correctly prepared, but assumptions are unrealistic?

Answer 12

reasonableness - modified
preparation - unmodified

Question 13

procedures for other assurance engagements are limited to…

Answer 13

• analytical procedures
• enquiries of management
• obtaining written reps

Question 14

issue with assurance engagements relating to greenhouse gases?

Answer 14

likely to be complex and subject ot uncertainty due to the difficulty of estimation/measurement

team requires skills relating to law, regulation, quantification and reporting

Question 15

how do reasonable/limited assurance engagements differ in terms of audit procedures?

Answer 15

reasonable assurance engagements require more detailed testing

further audit procedures can be applied