30 Questions
In an assurance engagement, how would you classify the management of an audit client and the auditor?
Both are responsible parties
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?
Financial, systems and processes
Which classification best describes zero customer complaints and product recall in terms of subject matter information?
Both are subject matter information (SMI)
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)
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
In assurance engagements, what does a relevant criterion primarily relate to?
Subject matter
What is one of the suitable criteria for an assurance engagement?
Relevance
How can the practitioner reduce engagement risk in an assurance engagement?
By applying professional skepticism
What does sufficiency of evidence measure in an assurance engagement?
Quantity of evidence
Which risk relates to expressing an inappropriate conclusion in an assurance engagement?
Detection Risk
What is a characteristic of suitable criteria for an assurance engagement?
Neutrality
How are the quality and quantity of evidence affected in an assurance engagement?
By characteristics of the subject matter & circumstances of the engagement
Which type of evidence is more reliable when obtained from independent sources outside the entity?
Evidence obtained from independent sources
What makes evidence obtained directly by the practitioner more reliable?
Evidence exists in documentary form
In what form is evidence more reliable according to the text?
Documentary form, whether paper, electronic, or other media
Which of the following statements is true about non-assurance services?
Non-assurance services lack one or more element(s) of an assurance engagement
Which type of evidence is considered more reliable by the practitioner?
Evidence provided by original documents
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
What should the practitioner consider regarding Evidence-Gathering Procedures?
Materiality, nature, timing, and extent
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
What type of service lacks one or more elements of an assurance engagement?
Agreed-upon procedures engagements
In what form is a written assurance report provided by the practitioner?
Positive form
Which service provides a moderate level of assurance about financial information?
Review engagements
What level of assurance does a practitioner provide in agreed-upon procedures engagements?
Low level of assurance
What is a key characteristic of criteria that are sufficiently complete?
They include all relevant factors that could affect the conclusions
Why is obtaining a perfect level of assurance not possible according to the text?
Both reasons are true
What do complete criteria allow for when used in similar circumstances by qualified practitioners?
Reasonably consistent evaluation or measurement
From the text, what can be said about the possibility of obtaining different levels of assurance?
Only the Absolute level is possible
What should conclusions derived from the criteria contribute to according to the text?
Conclusions that assist decision-making by users
Why should relevant factors not be omitted according to the text?
To ensure the completeness of conclusions in engagement circumstances
Test your knowledge on the classification of parties and subject matters relevant to assurance engagements in auditing. Determine the roles of management, auditors, responsible parties, and intended users in an assurance engagement.
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