Auditing Theory - Assurance
Engagements to Understanding the
Entity
The demand for assurance engagements arises because the interests of the users of
information may be different from that of the interests of those responsible for providing
information.
True or False? - ANSTrue
The criteria by which an audit or evaluates the information under audit may vary with the
information being audited.
True or False? - ANSTrue
The practitioner normally expresses limited assurance in a positive manner.
True or False? - ANSFalse
Independence standards are required for audits of public companies, but not for audits of
private companies.
True or False? - ANSFalse
CPAs are the exclusive providers of assurance engagements as the subject matter of assurance
engagements is limited only to financial information of a business entity.
True or False? - ANSFalse
The responsible party can be one of the intended users and may be the only one.
True or False? - ANSFalse
Whether a particular engagement is an assurance engagement will depend upon whether it
exhibits all the following three elements - a three party relationship, a subject matter and
suitable criteria.
True or False? - ANSFalse
,The purpose of assurance engagements is to improve the quality of the information provided.
True or False? - ANSTrue
Under direct reporting assurance engagement, 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 (representation) by the responsible party that is made available to the intended users.
True or False? - ANSFalse
Independence is an attribute necessary to perform assurance engagements and is only required
for assurance engagements providers.
True or False? - ANSTrue
Which of the following criteria is unique to the independent auditor's attest function?
A. Familiarity with the particular industry of each client.
B. Independence.
C. Due professional care.
D. General competence. - ANSB. Independence
In performing an attestation engagement, the CPA normally
A. Assesses control-risk at a low level
B. Provides management consulting advice
C. Supplies litigation support services
D. Expresses a conclusion about an assertion - ANSD. Expresses a conclusion about an
assertion
Unlike the performance of a consulting service, in an assurance service, it involves
A. Report on the quality of information
B. Report on how to use information
C. Are two-party contracts
D. Make recommendations to management - ANSA. Report on the quality of information
The decision as to whether the criteria are suitable Involves considering whether the subject
matter Is capable of reasonably consistent evaluation against or measurement using such
criteria. The characteristics for determining whether criteria are suitable Include the following,
except
A. Reliability
B. Sufficiency
, C. Relevance
D. Understandability - ANSB. Sufficiency
Given the following, evaluate if it is possible to obtaining:
I. Absolute Assurance
II. Reasonable Assurance
A. All are possible
B. Only I is possible
C. Only I is impossible
D. All are impossible - ANSC. Only I. is impossible
The following is a key attribute needed to perform assurance, except?
A. accounting skills
B. independence
C. established criteria or standards
D. subject matter knowledge - ANSA. Accounting Skills
Which of the following Is broadest In scope?
A. Audits of financial statements.
B. Operations audit.
C. Assurance services.
D. Review of financial statements - ANSC. Assurance Services
The need for assurance services arises for all of the following reasons except:
A. Potential bias in providing information.
B. Complexity of the processing systems.
C. Closeness between a user and the organization.
D. Remoteness between a user and the organization. - ANSC. Closeness between a user and
the organization
The characteristics for determining whether criteria in an assurance engagement are suitable
include the following, except
A. Verifiability
B. Completeness
C. Understandability
D. Neutrality - ANSA. Verifiability
Classify the following parties relevant to an assurance engagement:
• Management of an audit client
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller QualityPDF. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
