E3 Assurance engagements and the audit ecosystem

Written by Saad Rahman (ACCA)

ACCA · New at Expertise level · 8 questions

Name: ____________________   Date: ____________

1. Which of these is one of the five elements of an assurance engagement?

   • A Suitable criteria
   • B A management bonus
   • C An audit fee
   • D A tax computation

2. What does a review of financial statements give?

   • A No assurance
   • B Absolute assurance
   • C Limited assurance, expressed as a negative conclusion
   • D Reasonable assurance, expressed positively

3. Can an assurance practitioner confirm that a forecast will be achieved?

   • A Yes, always
   • B Yes, if the entity is audited
   • C Only if it is a short forecast
   • D No, only whether the assumptions are reasonable and the forecast is properly prepared

4. Which is a limitation of an audit?

   • A It prevents all fraud
   • B It is based on sampling and judgement
   • C It gives absolute assurance
   • D It tests every transaction

5. What is the expectation gap?

   • A The gap between profit and cash
   • B The time between year end and the report
   • C The difference between what users expect of an audit and what it provides
   • D The difference between the audit fee and the budget

6. Which statement is correct about sustainability information?

   • A It can be subject to assurance at a reasonable or limited level, with suitable criteria
   • B It cannot be assured
   • C It needs no criteria
   • D It must always be audited like financial statements

7. An auditor gives reasonable assurance. How is the conclusion expressed?

   • A As nothing has come to attention
   • B Positively, for example that the statements give a true and fair view
   • C As a guarantee of future results
   • D Not at all

8. Users think the audit opinion means that the entity is a good investment. This shows:

   • A A good audit
   • B A limited review
   • C Fraud
   • D Misunderstanding of the auditor's role