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    QUIZ No. 1

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    Kathleen
    This document contains a 25 question multiple choice quiz on assurance services. The quiz covers topics such as the different types of assurance engagements, the elements and objectives of assurance engagements, and the roles and responsibilities of different parties in an assurance engagement. It tests understanding of key concepts like subject matter, criteria, evidence, and reporting in assurance engagements.

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    QUIZ No. 1

    Uploaded by

    Kathleen
    176 views6 pages
    This document contains a 25 question multiple choice quiz on assurance services. The quiz covers topics such as the different types of assurance engagements, the elements and objectives of assurance engagements, and the roles and responsibilities of different parties in an assurance engagement. It tests understanding of key concepts like subject matter, criteria, evidence, and reporting in assurance engagements.

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    This document contains a 25 question multiple choice quiz on assurance services. The quiz covers topics such as the different types of assurance engagements, the elements and objectives of assurance engagements, and the roles and responsibilities of different parties in an assurance engagement. It tests understanding of key concepts like subject matter, criteria, evidence, and reporting in assurance engagements.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    176 views6 pages

    QUIZ No. 1

    Uploaded by

    Kathleen
    This document contains a 25 question multiple choice quiz on assurance services. The quiz covers topics such as the different types of assurance engagements, the elements and objectives of assurance engagements, and the roles and responsibilities of different parties in an assurance engagement. It tests understanding of key concepts like subject matter, criteria, evidence, and reporting in assurance engagements.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 6

    AUD 001

    QUIZ No. 1

    Name:

    Multiple Choice Questions


    Instruction. Choose the letter of your choice by highlighting with the color yellow.

    1. Which of the following is not one of the major categories of practitioner’s services?
    a. Compilation engagement.
    b. Assurance engagements on subject matters other than historical financial information.
    c. Related service framework.
    d. Compilation engagement.

    2. An example of an assurance engagement is


    a. Labor data for union contact negotiation.
    b. Audit of financial statements of a medium size company.
    c. Regulator’s questionnaire on business ethics and conduct.
    d. Insurance claims data.

    3. Which of the following is not one of the five elements exhibited by assurance engagements?
    a. The subject matter.
    b. Suitable criteria.

    c. Sufficient appropriate evidence


    d. A multi-party relationships.

    4. What does an auditor do?


    a. Provide a guarantee on the ongoing viability of a company.
    b. Provide an independent opinion on the financial report.
    c. Help management to produce the financial report.
    d. Ensure that the financial report contains no fraud or error.

    5. Which of the following is an accurate statement regarding assurance services?


    a. Assurance services improve the quality of information for decision makers.
    b. Assurance services must be performed by a CPA.
    c. An attestation service is not a type of assurance service.
    d. Assurance services can only be performed on financial data.

    6. Subject matter and subject matter information of an


    assurance engagement can take all of the
    following, except:
    a. Physical characteristics.
    b. Non-financing performance or conditions.
    c. Litigation planning.
    d. Financial performance or conditions.
    7. Assurance services differ from consulting services in that they

    Involved Monitoring of
    Focus on Outcomes One Party by
    Another
    a. Yes Yes
    b. Yes No
    c. No Yes
    d. No No

    8. What is the type of assurance engagement that has as its subject matter a non-historical financial
    information?
    a. Special purpose engagement.
    b. Agreed-upon procedures.
    c. Review of financial statements.
    d. Prospective financial information.

    9. The following statements relate to assurance engagements. Choose the incorrect statements.
    1. The objective of an assurance engagement is
    for a professional accountant to evaluate or
    measure a subject matter that is the
    responsibility or another party against identified
    suitable criteria, and to express a conclusion
    that provides the intended user with a level of
    assurance about the subject matter.
    2. Assurance engagements performed by
    professional accountants are intended to
    enhance the credibility of information about a
    subject matter.
    3. Assurance engagements involve two parties: a
    professional accountant and an intended user.
    4. The subject matter of an assurance engagement
    is limited to historical or prospective financial
    information.
    5. The intended user in an assurance engagement
    is the person or class of persons for whom the
    professional accountant prepares the report
    for a specific use or purpose.

    a. 2, 3 ,4, and 5
    b. 2, 4 and 5
    c. 3 and 4
    d. 1, 2, 3, and 4

    10. How does the related services framework differ from the assurance framework?
    a. Related services claim compliance with PSAs.
    b. Related services engagements do not result in an opinion.
    c. Related services enhance the degree of confidence intended users can have.
    d. Related services claim compliance with PSAEs.

    11. Which of the following is not true about the subject matter of an assurance engagement?
    a. It is the topic about which the assurance is conducted.
    b. It could be information such as financial statements,
    statistical information and non-financial
    performance indicators.
    c. It could be the Philippine Financial Reporting Standards.
    d. It could be systems and processes or behavior.

    12. A responsible party does each of the following, except:


    a. Selects the audit procedures.
    b. Determines the subject matter.
    c. Selects criteria.
    d. Engages the practitioner.

    13. The characteristics for assessing whether criteria are suitable are all the following, except
    a. Reliability.
    b. International acceptance.
    c. Understandability
    d. Neutrality

    14. Sufficiency of evidence is


    a. Evidence which is adequate.
    b. The measure of the quality of evidence.
    c. The measure of the quantity of evidence.
    d. Evidence which is material.

    15. In a limited assurance engagement, the practitioner


    a. Has obtained sufficient appropriate evidence to
    reduce assurance engagement risk to an
    acceptably low level.
    b. Expresses the conclusion in a positive form.
    c. Expresses the conclusion in the negative form.
    d. Conveys reasonable assurance.

    16. Professional judgement is


    the application of relevant training, knowledge and
    experience, within the context provided by , in
    making informed decisions about the courses of
    action that are appropriate in the circumstances of
    the audit engagement.
    a. Philippine Financial Reporting Standards.
    b. Philippine Standards on Auditing.
    c. The Code of Professional Ethics of an Accountants.
    d. Auditing, accounting and ethical standards.

    17. The Philippine Framework for Assurance Engagements


    a. Establishes standards and provides procedural
    requirements for the performance of assurance
    engagements.
    b. Contains basic principles, essential procedures,
    and related guidance for the performance of
    assurance engagements.
    c. Provides a frame of reference for CPAs in public
    practice when performing audits, reviews, and
    compilations of historical financial information.
    d. Defines and describes the elements and objectives of
    an assurance engagement, and identifies
    engagements to which PSAs, PSREs, and
    PSAEs apply.

    18.
    in reaching conclusions on significant matters
    arising during the audit.
    a. Confirmation letters.
    b. Significant professional judgments made.
    c. The total evidence gathered.
    d. The interviews conducted with employees and management.

    19. Absolute assurance is generally not attainable as a result of various factors, such as
    a. The use of sampling in performing tests of controls and substantive tests.
    b. Internal control systems are subject to the risk of
    collusion and management override. No system is
    fool-proof.
    c. There are some assertions for which the only
    evidence comes from management
    representations, such as the completeness of
    minutes of meetings of the board of directors.
    d. All of these.

    20. An assurance report


    a. Provides reasonable assurance to the responsible party.
    b. Has a format that is uniquely different from PSA audit opinions.
    c. Is prepared by the responsible party.
    d. Provides a written report containing a conclusion
    that conveys the assurance obtained about the
    subject matter information.
    21. Users of a company’s financial statements demand independent audits because
    a. Users demand assurance that fraud does not exist.
    b. Management may not be objective in reporting.
    c. Users expect auditors to correct management errors.
    d. Management relies on the auditor to improve internal control.

    22. S1 Information risk refers to the risk that the auditor


    may express an unqualified opinion on the financial
    statements when in fact the financial statements are
    materially misstated
    S2 The biases and motives of the information provider may be a cause of information risk
    S3 The assumption underlying an audit of financial
    statements is that they will be used by different
    groups for similar purposes
    a. False, false, true
    b. False, true, false
    c. False, true, true
    d. True, false, false

    23. The Philippine Standards on Auditing issued by ASPC


    a. Are applicable only when an independent audit
    involving an expression of an opinion on
    financial statements is carried out
    b. Are the only authoritative source of auditing
    standards for members of the accountancy
    profession in the Philippines
    c. Are general guideline to help auditors
    d. Require that in no circumstances would an auditor
    may judge it necessary to depart from a PSA even
    though such a departure may result to more
    effective achievement of the objective of an audit

    24. Which of the following statements does not


    describe a condition that creates a demand for
    auditing?
    a. Conflict between an information preparer and a user can result in biased information
    b. Information can have a substantial economic consequences for a decision maker
    c. Expertise is often required for information preparation and verification
    d. Users can directly assess the quality of information

    25. The expertise that distinguishes auditors from accountants is in the


    a. Ability to interpret generally accepted accounting principles.
    b. Requirement to possess education beyond the Bachelor’s degree.
    c. Accumulation and interpretation of evidence.
    d. Ability to interpret ASC Statements.
    TRUE or FALSE. Write your answer after each sentence.

    26. The practitioner expresses reasonable assurance in a negative form of opinion.


    27. The practitioner must not issue an oral conclusion about a subject matter based on the
    identified suitable criteria and the evidence obtained
    28. Consulting services help enhance the credibility of the subject matter information.
    29. The objective of a reasonable assurance engagement is a reduction in assurance engagement
    risk to an acceptably low level in the circumstances of the engagement as the basis for a negative
    form of expression of the practitioner’s conclusion.
    30. Moderate level of assurance refers to the professional accountant having obtained sufficient
    appropriate evidence to conclude that the subject matter conforms in all material respects with
    identified suitable criteria.
    31. In compilation, the practitioner expresses his or her conclusion on the subject matter
    information.
    32. A limited assurance engagement, the practitioner expresses either a positive form of opinion
    or the negative form of opinion, depending on the circumstance.
    33. Philippine Framework for Assurance Engagement provides a frame of reference for the
    Auditing and Assurance Standards Council in its adoption of International Standards on
    Auditing, International Standards on Review Engagements and International Standards on
    Assurance Engagements for application in the Philippines.
    34. Assurance Engagement is a systematic process of objectively obtaining and evaluating
    evidence regarding assertions about economic actions and events to ascertain the degree of
    correspondence between those assertions and established criteria and communicating the results
    to interested users.
    35. Assertions are the representations of management as to the reliability of the information
    system.

    ESSAY. Minimum of 50 words


    1. What is the reason for a practitioner only provide reasonable assurance and not absolute
    assurance?
    2. Describe and differentiate the different services offered by a practitioner.
    3. How do you conduct an effective audit?

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