E3 Assurance engagements and the audit ecosystem

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

• 1 Suitable criteria
• 2 A management bonus
• 3 An audit fee
• 4 A tax computation

What does a review of financial statements give?

• 1 No assurance
• 2 Absolute assurance
• 3 Limited assurance, expressed as a negative conclusion
• 4 Reasonable assurance, expressed positively

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

• 1 Yes, always
• 2 Yes, if the entity is audited
• 3 Only if it is a short forecast
• 4 No, only whether the assumptions are reasonable and the forecast is properly prepared

Which is a limitation of an audit?

• 1 It prevents all fraud
• 2 It is based on sampling and judgement
• 3 It gives absolute assurance
• 4 It tests every transaction

What is the expectation gap?

• 1 The gap between profit and cash
• 2 The time between year end and the report
• 3 The difference between what users expect of an audit and what it provides
• 4 The difference between the audit fee and the budget

Which statement is correct about sustainability information?

• 1 It can be subject to assurance at a reasonable or limited level, with suitable criteria
• 2 It cannot be assured
• 3 It needs no criteria
• 4 It must always be audited like financial statements

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

• 1 As nothing has come to attention
• 2 Positively, for example that the statements give a true and fair view
• 3 As a guarantee of future results
• 4 Not at all

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

• 1 A good audit
• 2 A limited review
• 3 Fraud
• 4 Misunderstanding of the auditor's role