Fundamentals of Auditing: Assurance Engagement Classifications

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In an assurance engagement, how would you classify the management of an audit client and the auditor?

Both are responsible parties (correct)

Both are intended users

Intended user, practitioner

Responsible party, practitioner

When considering potential subject matters in an assurance engagement, how would you classify the cash flows of an entity and the effectiveness of an online payment system?

Systems and processes, financial

Both are financial

Both are systems and processes

Financial, systems and processes (correct)

Which classification best describes zero customer complaints and product recall in terms of subject matter information?

SM, SMI

Both are subject matter information (SMI) (correct)

Both are subject matters (SM)

SMI, SM

How would you categorize adherence to SEC regulations and a report on an entity's observance of SEC regulations in terms of subject matters?

Both are subject matters (SM) Signup and view all the answers

Are the following statements true or false: Evidential matters are benchmarks used to evaluate subject matters, and criteria refer to the information obtained by the practitioner?

Both are true Signup and view all the answers

In assurance engagements, what does a relevant criterion primarily relate to?

Subject matter Signup and view all the answers

What is one of the suitable criteria for an assurance engagement?

Relevance Signup and view all the answers

How can the practitioner reduce engagement risk in an assurance engagement?

By applying professional skepticism Signup and view all the answers

What does sufficiency of evidence measure in an assurance engagement?

Quantity of evidence Signup and view all the answers

Which risk relates to expressing an inappropriate conclusion in an assurance engagement?

Detection Risk Signup and view all the answers

What is a characteristic of suitable criteria for an assurance engagement?

Neutrality Signup and view all the answers

How are the quality and quantity of evidence affected in an assurance engagement?

By characteristics of the subject matter & circumstances of the engagement Signup and view all the answers

Which type of evidence is more reliable when obtained from independent sources outside the entity?

Evidence obtained from independent sources Signup and view all the answers

What makes evidence obtained directly by the practitioner more reliable?

Evidence exists in documentary form Signup and view all the answers

In what form is evidence more reliable according to the text?

Documentary form, whether paper, electronic, or other media Signup and view all the answers

Which of the following statements is true about non-assurance services?

Non-assurance services lack one or more element(s) of an assurance engagement Signup and view all the answers

Which type of evidence is considered more reliable by the practitioner?

Evidence provided by original documents Signup and view all the answers

In an engagement to perform agreed-upon procedures, what is the auditor engaged to do?

Carry out those procedures of an audit agreed upon by all parties and report factual findings Signup and view all the answers

What should the practitioner consider regarding Evidence-Gathering Procedures?

Materiality, nature, timing, and extent Signup and view all the answers

Can a practitioner change an assurance engagement to a non-assurance engagement if requested by the client?

No, once an assurance engagement is accepted, it cannot be changed to a non-assurance engagement Signup and view all the answers

What type of service lacks one or more elements of an assurance engagement?

Agreed-upon procedures engagements Signup and view all the answers

In what form is a written assurance report provided by the practitioner?

Positive form Signup and view all the answers

Which service provides a moderate level of assurance about financial information?

Review engagements Signup and view all the answers

What level of assurance does a practitioner provide in agreed-upon procedures engagements?

Low level of assurance Signup and view all the answers

What is a key characteristic of criteria that are sufficiently complete?

They include all relevant factors that could affect the conclusions Signup and view all the answers

Why is obtaining a perfect level of assurance not possible according to the text?

Both reasons are true Signup and view all the answers

What do complete criteria allow for when used in similar circumstances by qualified practitioners?

Reasonably consistent evaluation or measurement Signup and view all the answers

From the text, what can be said about the possibility of obtaining different levels of assurance?

Only the Absolute level is possible Signup and view all the answers

What should conclusions derived from the criteria contribute to according to the text?

Conclusions that assist decision-making by users Signup and view all the answers

Why should relevant factors not be omitted according to the text?

To ensure the completeness of conclusions in engagement circumstances Signup and view all the answers