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ASSURANCE ACA questions with correct answers
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ASSURANCE ACA questions with correct answers
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ASSURANCE ACAThe key elements for an assurance engagement - correct answer ✔✔CREST
what does CREST stand for? - correct answer ✔✔Criteria - The law/regulations that apply
Report - written conclusion/opinion/decision Evidence - Must be sufficient and appropriate Subject
matter - Whatever assurance is being provided
Three-party relationship
- R = responsible party - those responsible for preparing the subject matter
- I = intended users - Those who seek to rely on the assurance
- P = practitioner - provider of assurance
How will lenders, shareholders and directors benefit from assurance? - correct answer
✔✔SHAREHOLDERS = get an independant opinion and then can rely on FS
LENDERS = increase the credibility of FS
DIRECTORS = deter fraud, reduce management bias and identify errors
levels of assurance - correct answer ✔✔1. Reasonable Assurance
2. Limited Assurance
3. No Assurance
Limitations of assurance - correct answer ✔✔- testing on sample bias
- collusion in fraud
- professional judgement is subjective
- accounting estimates are used
- human error
what are types of management internal controls? - correct answer ✔✔CRIME
, what does CRIME stand for? - correct answer ✔✔- control activities (parisv)
- risk
- information systems
- monitoring
- control environment
limitations of internal contols - correct answer ✔✔- expense
- human element
- collusion
- unusual transactions
how should an auditor act? PIPCO - correct answer ✔✔professional compitance and due care
integrity
professional behaviour
confidentiality
objectivity
Small companies are not legally required to do an audit, what makes a small company? - correct answer
✔✔2/3 of the following:
- no more than £10.2m turnover
- no more than £5.1m assets
- no more than 50 employees
what are the objectives of an auditor? - correct answer ✔✔o Obtain reasonable assurance about
whether the financial statements are free from material misstatement, whether due to fraud or error.
o Report on the financial statements and communicate as required by the ISAs by the auditor's findings.
stages of an engagement - correct answer ✔✔1. obtaining an engagement
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