Which two of the following describe the roles of the practitioner in any assurance engagement
1. These are independent professional sen/ices that improve the quality of information for decision making. Show
c. Assurance services 2. Which of the following statements best describes assurance services? c. Independent professional services that are intended to enhance the credibility of information to meet the needs of an intended user. 3. Which of the following best describes the objective of an assurance engagement? c. To enhance the credibility of information in order to improve the likelihood that the information will meet the needs of an intended user. 4. The degree of certainty that the practitioner has attained and wishes to convey is: d. An assurance. 5. What level of assurance is provided by the auditor in an audit engagement? b. High, but not absolute, level of assurance 6. The level of assurance provided by an
audit of detecting a material misstatement is referred to as: c. Reasonable assurance. 7. Of the following, which is the broadest concept? d. Assurance services. 8. In performing attestation services, a CPA will normally: d. States a conclusion about a written assertion. 9. Which of the following is
the single feature that most clearly distinguishes auditing, attestation, and assurance: c. Scope of services. 10. Which of the following services provide the highest level of assurance to third parties about a company's financial statements? a. Audit. b. Review. c. Compilation. d. Each of the above provides the same level of assurance. a. Audit. 11. For assurance engagements regarding historical financial information, reasonable assurance engagements are called: a. Review engagements. b. Audit engagements. c. Compilation engagements. d. Agreed Upon procedures engagements. b. Audit engagements. 12. In some assurance engagements, the evaluation or measurement of the subject matter is performed by the responsible party, and the subject matter information is in the form of an assertion by the responsible party that is made available to intended users. These engagements are called d. Assertion-based engagements 13. The following are characteristics of "direct reporting" assurance engagements, except a. The practitioner either directly performs the evaluation or measurement of the subject matter or obtains a representation from the responsible party that has performed the evaluation or measurement. b. The subject matter information is in the form of an assertion by the responsible party that
is c. The representation of the responsible party that has performed the evaluation or measurement of the subject matter is not available to the intended users. d. The subject matter information is provided to the intended users in the assurance report. b. The subject matter information is in the form of an assertion by the responsible party that is 14. What type of assurance engagement is involved when the practitioner expresses a positive form of conclusion? a. Positive assurance engagement b. Limited assurance engagement c. Reasonable assurance engagement d. Absolute assurance engagement c. Reasonable assurance engagement 15. What type of assurance engagement is involved when the practitioner expresses a negative form of conclusion? a. Negative assurance engagement b. Assertion Based assurance engagement c. Limited assurance engagement d. Reasonable assurance engagement c. Limited assurance engagement 16. Assurance engagements involve: a. Two separate parties: a professional accountant and intended users. b. Two separate parties: a professional accountant and a responsible party. c. Three separate parties: a practitioner, a responsible party and intended users. d. Three separate parties: a professional accountant, a responsible party, and intended users. c. Three separate parties: a practitioner, a responsible party and intended users 17. which of the following statements concerning the assurance engagement's three party relationships is incorrect? a. The responsible party and intended users may be from different entities or the same entity. b. The term "practitioner" as used in the Framework for Assurance Engagements is broader than the term "auditor" as used in PSAs and PSREs. c. An entity's senior management (the responsible party) may engage a practitioner to perform d. In an assertion based engagement the responsible party is responsible for the subject matter information (the assertion), and may be responsible for the subject matter. c. An entity's senior management (the responsible party) may engage a practitioner to perform 18. Which of the following statements concerning the intended user of a professional accountant's report is incorrect? a. The responsible party and the intended user may both be within the same organization. b. The intended user should never be established by agreement between the practitioner and c. In some circumstances, the intended user may be established by law. d. The responsible party may also be one of the intended users. b. The intended user should never be established by agreement between the practitioner and 19. Which of the following is not one of the requirements before accepting an assurance engagement? a. The practitioner should be competent and independent. b. The practitioner should accept the engagement only if the subject matter is the responsibility of another party c. The practitioner should accept the engagement only if the subject matter is identifiable and in the form that can be subjected to evidence gathering procedures. d. The responsible party and the intended user of assurance report should be from different d. The responsible party and the intended user of assurance report should be from different organizations. 20. The following statements relate to the three parties involved in an assurance engagement. Which is correct? a. The responsible party and the intended users should always be from different entities. b. A practitioner should not accept an assurance engagement when the subject matter of the engagement requires specialized skills and knowledge beyond those ordinarily possessed by the practitioner. c. A responsible party is the person who is responsible for the subject matter or the subject d. In all assurance engagements, the responsible party is the engaging party, i.e., the party that engages the practitioner c. A responsible party is the person who is responsible for the subject matter or the subject matter information. 21. Suitable criteria are required for
reasonably consistent evaluation or measurement of the subject matter of an assurance engagement. Which of the following statements concerning the characteristics of suitable criteria is a. Relevant criteria allow reasonably consistent evaluation or measurement of the subject matter including, where relevant, presentation and disclosure, when used in similar circumstances by similarly qualified practitioners. b. Reliable criteria contribute to conclusions that are clear, comprehensive, and not subject to significantly different interpretations. c. Criteria are sufficiently complete when they contribute conclusions that are clear, comprehensive, and not subject to different interpretations. d. Neutral criteria contribute to conclusions that are free from bias. d. Neutral criteria contribute to conclusions that are free from bias. 22. Criteria that are embodied in
laws or regulations, or issued by authorized or recognized bodies of experts that a. Suitable criteria b. General criteria c. Established criteria d. Specifically developed criteria c. Established criteria 23. Which of the following is not a characteristic of suitable criteria? a. Completeness b. Comparability c. Neutrality d. Relevance b. Comparability 24. The criteria to be used for a particular engagement can either be established or specifically developed. Established criteria are those a. Designed for the purpose of the engagement. b. Embodied in laws or regulations or issued by authorized or recognized bodies of experts that c. Made available to the intended users. d. Not made available to the intended users. b. Embodied in laws or regulations or issued by authorized or recognized bodies of experts that 25. A practitioner should accept an assurance engagement only if a. The subject matter is the responsibility of either the intended users or the practitioner. b. The subject matter is in the form of financial information. c. The practitioner's conclusion is to be contained in a written report. d. The criteria to be used are not available to the intended users. c. The practitioner's conclusion is to be contained in a written report. 26. In an assurance engagement, this refers to the information obtained by the practitioner in arriving at the conclusions on which the conclusion is based. a. Generally accepted auditing standards b. Assertions c. Criteria d. Evidence d. Evidence 27. Assurance engagement risk is the risk b. That the practitioner expresses an inappropriate conclusion when the subject matter information is materially misstated. 28. The following are components of assurance engagement
risk, except a. Business risk 29. The predominant type of attestation service performed by CPAs is: a. Audit 30. Which of the following characteristics is not considered
necessary in determining whether the criteria are suitable? a. Sufficiency 31. The assurance report is often addressed to the intended users which may be: c. Both A and B 32. When performing an assurance sen/ice, professional accountants use standards or benchmarks to evaluate or measure the subject matter of an assurance engagement. This is known as: c. Criteria. 33. Which of the following services provides positive
assurance through attestation? c. Auditing 34. The three commonly sought types of assurance service are:
c. Audits, reviews, and other assurance services. 35. Positive assurance is expressed through: a. Attestation 36. The subject matter of an assurance engagement can
take the following forms except d. Evaluation of a capital investment proposal. 37. Which of the following statements best describes review services? d. Review engagements focus on providing limited assurance on financial statements of
a 38. A review of a company's financial statements by a CPA firm: d. Is designed to provide only moderate assurance. 39. The objective of a review of financial statements is to: c. State whether anything has come to the auditor's attention that indicates that the financial statements are not presented fairly. 40. Which of the following is incorrect regarding a compilation engagement? a. The CPA uses his auditing expertise to collect, classify and summarize financial information. 41. The type of assurance that is provided by the CPA on a compilation report is: b. No assurance. 42. Which of the following statements concerning compilation engagement is incorrect? d. The procedures employed in a compilation engagement enable the accountant to express a moderate level of assurance on the compiled financial information. 43. Assurance services differ from consulting services in that they b. II only. 44. For assurance engagements which are neither audits nor reviews of historical financial information, the following standard applies: c. PSAEs 45. Unlike consulting services, in assurance services: c. Competing interests may exist between management and the users of statements 46. The attest function b. Includes the preparation of a written report of the CPA's conclusion. 47. Which of the following is an assurance service? a. Performance measurement 48. Non Assurance engagements include all of the following sen/ices, except: c. Examination of prospective financial information 49. Unlike consulting services, assurance services: d. Report on the quality of information. 50. Identify the correct statement. d. Accounting services do not provide attestation. 51. An attestation engagement is one in which a CPA is engaged to:
b. Issue a written communication expressing a conclusion about the reliability of a written 52. Assurance engagements encompass the following type of services, except: c. Management consulting. 53. A report on factual findings is the end product of the auditor when performing: c. Agreed-upon procedures 54. What assurance is provided by the auditor in an agreed upon procedures engagement? a. No assurance. 55. The term "accountant" has been used by Auditing and Assurance Standards Council to refer to a CPA in public practice who is engaged to: d. Compile financial statements. 56. Which of the following best describes
relationships among auditing, attest and assurance services? c. Auditing is a type of assurance service. 57. When providing consulting service, the CPA acts primarily as a(n): c. Objective advisor on the use of information. 58. Which of the following statements concerning consulting services is incorrect? c. Consulting services ordinarily involve external reporting 59. In an engagement to perform
agreed upon procedures, an auditor is engaged to: d. Carry out those procedures of an audit nature to which the auditor and the entity and any appropriate third parties have agreed and to report on factual findings. 60. Compilation is an example of which one of the following types of services? b. Accounting 61. Non Assurance engagements include all of the following except d. Compliance audit. 62. In performing an assurance engagement, a professional accountant typically b. Expresses a conclusion about an assertion 63. Which of the following is not an assurance engagement? d. Management Consulting Service 64. Assurance engagements should exhibit the following elements except d. Appropriate professional fees 65. Which of the following forms may be the subject matter of assurance engagements? d. All of the above 66. Which of the following is not an element of assurance engagements? c. Engagement process 67. Engagement risk is influenced by the risks associated with the following except a. Nature and form of the subject matter. b. Nature and form of the criteria applied to the subject matter. c. Nature and extent of the process used to collect and evaluate evidence. d. Unreasonably low professional fee. d. Unreasonably low professional fee. 68. Absolute assurance is not attainable as a result of such factors as: a. The use of selective testing. b. The inherent limitations of control systems. d. All of the above d. All of the above 69. A CPA should not submit unaudited financial statements of a nonpublic entity to a client or others unless, as a minimum, the CPA complies with the provisions applicable to a. Compilation engagements. 70. This tax service includes the determination of the tax consequences of planned or potential transactions, followed by making suggestions on the most desirable course of action such as to legally minimize the tax liability while achieving the client's objectives: a. Tax shelter d. Tax planning 71. You own Dude, Inc., which manufactures wooden tables. You need to hire some accountants to prepare your monthly financial statements. The preparation of your financial statements is referred to as a(n): a. Audit. b. Compilation. 72. Distribution of a report is
always restricted when: d. Agreed-upon procedures have been performed. 73. The need for assurance services arises because: a. There is a consonance of interests of the preparer and the user of the financial statements. b. There is a potential bias in providing information. c. Economic transactions are less complex than they were a decade ago. d. Most users today have access to the system that generates the financial state mean they use. b. There is a potential bias in providing information. 74. Assurance services involve which of the following? a. Relevance as well as reliability. b. Nonfinancial information as well as traditional financial statements. c. Electronic databases as well as printed reports. d. All of the above. d. All of the above. 75. Which of the following statements is true? a. The degree or level of assurance that may be provided by the practitioner is inversely related to the scope of procedures performed and their results. b. Assurance engagements do not require independence. c. The term "auditor" is broader in scope compared to the term "practitioner." d. Assurance engagements performed by professional accountants are intended to enhance the credibility of information. d. Assurance engagements performed by professional accountants are intended to enhance the credibility of information. 76. Which of the following statements is true? a. Professional standards prohibit CPM from performing non assurance engagements. b. Absolute assurance is attainable owing to the fact that much of the evidence available to the CPA is persuasive rather than conclusive. c. The responsible party expresses a conclusion that provides a level of assurance as to whether the subject matter conforms, in all material respects, with the identified suitable criteria. d. The CPA's conclusion provides a level of assurance about the subject matter.
d. The CPA's conclusion provides a level of assurance about the subject matter. 77. Assurance engagement include the following, except d. An engagement to perform agreed-upon procedures. 78. The subject matter of an assurance engagement may include d. I, II, and III 79. In assertion based assurance engagements, the evaluation or measurement of the subject matter against criteria is performed by the b. Responsible party 80. Which of the following statements is true
concerning evidence in an assurance engagement? b. Sufficiency is the measure of the quantity of evidence.
81. An unqualified conclusion is not appropriate for either reasonable or limited assurance engagement when: c. Either I or II 82. The following statements relate to the performance of an assurance engagement other than an audit or review of historical financial information covered by PSAs and PSREs. Which is incorrect? c. The practitioner is not allowed to use the work of persons from other
professional 83. Reducing assurance engagement risk to zero is vew rarely attainable or cost beneficial as a result of the following factors, except c. The practitioner may not have the required assurance knowledge and skills to gather and 84. Which of the following standards are to be applied, as appropriate, in the audit of historical financial c. PSAs 85. Which of the following standards are to be applied to compilation engagements and engagements to perform agreed upon procedures to information? a. PSRSs b. PSAS c. PSAEs d. PSRES a. PSRSs 86. The Philippine Standards on Review Engagements (PSREs) are to be applied in a. The audit of historical financial information. b. Assurance engagements dealing with subject matters other than historical financial information. c. The review of both historical and prospective financial information. d. The review of historical financial information. d. The review of historical financial information. 87. PSRE 2400 (Engagements to Review Financial Statements), as amended by the AASC in February 2008, applies to a. Reviews of any historical financial information of an audit client. b. Reviews of historical financial or other information by a practitioner other than the entity's auditor. c. Reviews of historical financial or other information of an audit client. d. Reviews of any historical financial information by a practitioner other than the entity's d. Reviews of any historical financial information by a practitioner other than the entity's auditor. 88. The Philippine Standards on Assurance Engagement (PSAEs) are to be applied in a. The audit or review of historical financial information. b. Assurance engagements dealing with subject matters other than historical financial c. Compilation engagements and agreements to apply agreed upon procedures to information. d. Assurance engagements dealing with historical financial information. b. Assurance engagements dealing with subject matters other than historical financial 89. The Philippine Standards on Quality Control (PSQCs) are to be applied to a. All services that fall under the AASC's engagement standards. b. Assurance engagements only. c. Review engagements only. d. Compilation and review engagement only. a. All services that fall under the AASC's engagement standards. 90. These statements are issued by the AASC to provide interpretive guidance and practical assistance to auditors in the implementation of PSAs and to promote good practice. a. PREPSs b. PAPSs c. PAEPs d. PRSPSS b. PAPSs 91. For the purpose of expressing negative assurance in the review report, the practitioner should obtain sufficient appropriate evidence primarily through a. Inquiry and confirmation b. Analytical procedures and substantive tests of details of transactions and account balances c. Confirmation and tests of controls d. Inquiry and analytical procedures d. Inquiry and analytical procedures 92. A practitioner's review of an entity's financial statements does not provide assurance that he/she will become aware of all significant matters that would be disclosed in an audit. However, if the practitioner has become aware that information coming to his/her attention may be materially misstated, the practitioner should a. Perform a complete audit and issue a modified auditor's report. b. Withdraw immediately from the engagement. c. Carry out additional or more extensive procedures as are necessary to achieve limited d. Downgrade the engagement to a compilation and issue the appropriate report. c. Carry out additional or more extensive procedures as are necessary to achieve limited assurance. 93. The following statements relate to a review of financial statements. Which is incorrect? a. The objective of a review of financial statements is to enable a practitioner to state whether, on the basis of procedures which do not provide all the evidence that would be required in an audit, anything has come to the practitioner's attention that causes the practitioner to believe that the financial statements are not prepared, in all material respects, in accordance with an identified financial reporting framework. b. A review ordinarily involves an assessment of accounting and internal control systems, tests c. A review comprises inquiry and analytical procedures are designed to review the reliability of an assertion that is the responsibility of one party for use by another party. d. The level of assurance provided in a review report is las than that given in an audit report. b. A review ordinarily involves an assessment of accounting and internal control systems, tests of records, and of responses to inquiries by
obtaining corroborating evidence through 94. The following statements relate to a review of interim financial information performed by the entity's independent auditor. Which is incorrect? a. A review of interim financial information does not provide a basis for expressing an opinion whether the financial information is presented fairly, in all material respects, in accordance with an applicable financial reporting framework. b. Similar to a financial statement audit, a review of interim financial information is designed to c. In a review of interim financial information, the auditor should have an understanding of the entity and its environment, including its internal control, as it relates to the preparation of both annual and interim financial information, sufficient to plan and conduct the engagement. d. A review of interim financial information may bring significant matters affecting the interim financial information to the auditor's attention, but it does not provide all of the evidence that would be required in audit. b. Similar to a financial statement audit, a review of interim financial information is designed to obtain reasonable assurance that the interim financial information is free from material misstatement. 95. When performing a compilation engagement, the accountant is required to a. Make inquiries of management to assess the reliability and completeness of the information provided. b. Assess internal controls. c. Verify matters and explanations. d. Obtain a general knowledge of the business and operations of the entity. d. Obtain a general knowledge of the business and operations of the entity. 96. Each page of the financial information compiled by the accountant should include the following reference, except a. "Unaudited" b. "Compiled, Negative Assurance Expressed" c. "Compiled without Audit or Review" d. "Refer to Compilation Report" b. "Compiled, Negative Assurance Expressed" 97. An auditor may accept an engagement to perform specified procedures on the specific subject matter of specified elements, accounts, or items of a financial statement if a. The report does not list the procedures performed. b. The auditor is also the entity's continuing auditor. c. The financial statements are prepared in accordance with a special purpose framework. d. Use of the report is restricted. d. Use of the report is restricted. 98. An engagement to perform agreed upon procedures may involve the auditor in performing certain procedures concerning I. Individual items of financial data. II. A single financial statement. III. A complete set of financial statements. a. I and 11 only b. 11 and 111 only c. I and 111 only d. 1, II, and III d. 1, II, and III 99. The following contain basic principles, essential procedures and related guidance, consistent with the concepts in the Framework, for the performance of assurance engagements, except a. PSAs b. PSREs c. PSAEs d. PSRSs d. PSRSs 100. CPAs in public practice who perform assurance engagements are governed by the following, except a. Framework for Assurance Engagements b. Philippine Standards on Quality Control c. Code of Ethics for Professional Accountants in the Philippines d. AASC's Engagement Standards (PSAs, PSREs, PSAEs, and PSRSs) d. AASC's Engagement Standards (PSAs, PSREs, PSAEs, and PSRSs) 101. The Philippine Framework for Assurance Engagements a. Provide a frame of reference for CPAs in public practice when performing audits, reviews, and compilations of historical financial information. b. Contains basic principles, essential procedures, and related guidance for the performance of assurance engagements. c. Establishes standards and provide procedural requirements for the performance of assurance engagements. d. Defines and describes the elements and objectives of an assurance engagement, and d. Defines and describes the
elements and objectives of an assurance engagement, and 102. The procedures employed in doing compilation are: a. Designed to enable the accountant to express a limited assurance b. Designed to enable the accountant to express a negative assurance c. Not designed to enable the accountant to express any form of assurance d. Less extensive than review procedures but more extensive than agreed upon procedures c. Not designed to enable the accountant to express any form of assurance 103. Which of the following procedures is normally performed in connection with a compilation engagement? a. Inquire of management about subsequent events b. Making inquiries of management concerning actions taken at board meeting c. Applying analytical review procedures d. Collect, classify and summarize financial information. d. Collect, classify and summarize financial information. 104. An engagement to apply agreed upon procedure engagement may be accepted, provided a. The CPA has audited the financial statements of the client. b. The CPA is independent with respect to the client. c. The distribution of the report will be limited only to specified parties involved. d. The adequacy of the procedures to be performed will be determined by the CPA. c. The distribution of the report will be limited only to specified parties involved. 105. Pronouncements of Auditing and Assurance Standards Council (AASC) do not cover a. Review engagement b. Compilation engagement c. Consultancy d. Agreed Upon procedures engagement c. Consultancy 106. Which of the following is an example of an assurance engagement? a. Management advisory services b. Reporting on financial statements prepared using other comprehensive basis of accounting. c. compilation of financial information d. preparation of tax returns b. Reporting on financial statements prepared using other comprehensive basis of accounting 107. Which of the following statements about assurance engagements is not correct? a. Assurance engagements are intended to enhance the credibility of information about a subject matter by evaluating whether the subject matter conforms in all material respects with suitable criteria. b. The subject matter of an assurance engagement may take many forms such as data, systems and c. Not all engagement performed by professional accountants are assurance engagements. d. The Philippine Standards on Assurance Engagements issued by AASC describe the objectives and elements of assurance engagements to provide either a high, moderate or low level of assurance. d. The Philippine Standards on Assurance Engagements issued by AASC describe the objectives and elements of assurance engagements to provide either a high, moderate or low level of assurance 108. Which of the following services provides a moderate level of assurance about the client's financial statements? a. Forecasts and projections b. Compliance with contractual agreement c. Review d. Compilation c. Review 109. The form of attestation that provides the highest form of assurance is a(n): a. Review. b. Assembly c. Compilation. d. Examination. d. Examination. 110. In an engagement to perform agreed upon procedures, an auditor is engaged to: a. Carry out those procedures of an audit nature to which the auditor and the entity and any b. Use accounting expertise as opposed to auditing expertise to collect, classify, and summarize financial information. c. Provide a moderate level of assurance that the information is free of material misstatement. d. Provide a high, but not absolute, level of assurance that the information is free of material misstatement. a. Carry out those procedures of an audit nature to which the auditor and the entity and any appropriate third parties have agreed and to report on factual findings.
111. The report on an agreed upon procedures engagement should contain: a. A general description of the procedures performed. b. An expression of positive assurance based on the spedfic procedures performed. c. A statement that the auditor is independent of the entity. d. Identification of the purpose for which the agreed-upon procedures were performed. d. Identification of the purpose for which the agreed-upon procedures were performed 112. A report may be based upon applying agreed upon procedures to specified elements, accounts, or items of a financial statement. The users of the report should participate in establishing the procedures to be performed. If the auditor cannot discuss the procedures with all the parties who will receive the report, 1. Discuss the procedures to be applied with appropriate representatives of the parties involved. III. Distribute a draft of the type of report that will be issued to the parties involved. a. I and 11 only b. I and 111 only c. II and 111 only d. 1, II, and III d. 1, II, and III 113. Which of the following statements concerning consulting services is false? a. The performance of consulting services for audit clients does not, in and of itself, impair the auditor's independence. b. Consulting services differ fundamentally from the CPA's function of attesting to the assertions of other parties. c. Consulting services ordinarily involve external reporting. d. Most CPAs, including those who provide audit and tax services, also provide consulting services to their clients. c. Consulting services ordinarily involve external reporting 114. The form of communication with a client in a consulting services engagement should be a. Either written or oral. a. Either written or oral. 115. Which of the following is the most appropriate action to be taken by a CPA who has been asked to perform a consulting services engagement concerning the analysis of a potential merger if he/she has little experience with the industry involved? a. Accept the engagement but he/she should conduct research or consult with others to obtain a. Accept the engagement but he/she should conduct research or consult with others to obtain sufficient competence. 116. The Philippine Standards on Auditing (PSA) require that a report be issued whenever a CPA firm: b. Is associated with financial statements. 117. A practitioner is associated with financial information when: c. Either I or II. 118. If the auditor learns that an entity is inappropriately using the auditor's name in association with financial information, he/she should: a. Remain silent. b. Require management to cease doing so. c. Inform any known third party users of the inappropriate use of his/her name in connection with the information. d. Seek legal advice if necessary. b. Require management to cease doing so. Which two of the following describe the roles of the responsible party in any assurance engagement?The three parties typically involved in an assurance engagement are: the responsible party, the users and the practitioner. The responsible party performs operations or provides information for the benefit of or relevant to users. This party is responsible for the subject matter over which assurance is sought.
What are the two types of assurance engagement?Under this Framework, there are two types of assurance engagement a practitioner is permitted to perform: a reasonable assurance engagement and a limited assurance engagement.
Which three of the following are key elements of a general assurance engagement?The five elements of an assurance engagement
The elements are: the three-party relationship; appropriate subject matter; suitable criteria; appropriate evidence; and a conclusion.
Which of the following types of engagement is intended to provide reasonable assurance?5.1. 1 Addressing a change in risks when issues are identified. |