1 Which statement is correct regarding assurance engagements? A It is an engagement in which a practitioner expresses a conclusion designed to enhance the degree of confidence of the intended users other than the responsible party about the outcome of the evaluation or measurement of a subject matter against criteria. B. All engagements performed by professional accountants are assurance engagements. C. Whether a particular engagement is an assurance engagement will depend upon whether it exhibits all the following elements: a three-party relationship, a subject matter, and suitable criteria. D. CPAs are the exclusive providers of assurance engagements as the subject matter of assurance engagements is limited only to financial information of a business entity 2. The need for assurance services arises for all of the following reasons except: A Potential bias in providing information B. Closeness between a user and the organization. C. Complexity of the processing systems. D. Remoteness between a user and the organization, a. 3. In accordance with the Philippine Framework for Assurance Engagements, obtaining absolute assurance is generally not attainable as a result of such factors as: b. CA d. The use of selective testing Yes Yes Yes No The inherent limitations of internal control Yes Yes Yes Yes The use of judgment Yes No Yes No Most audit evidence are persuasive rather than conclusive No Yes Yes Yes In some cases, the characteristics of the subject matter No No Yes Yes 4 There are two types of assurance engagements according to structure: attestation engagements and direct engagements. The main difference between the two lies in who is measuring, or evaluating, the underlying subject matter against the criteria. In an attestation engagement, who primarily performs the evaluation and measurement of subject matter? A. Responsible party B. Practitioner C. Third party D. The public 5. Which of the following refers to "criteria" element of assurance engagement? A. Benchmarks used to evaluate or measure the subject matter B Information obtained by the practitioner in arriving at the conclusions on which the opinion is based C Contains a conclusion that conveys the assurance obtained about the subject matter information D The subject matter, and subject matter informatich (assertion), of an assurance engagement. 6. The subject matter of an assurance engagement may take many forms, including: a. b. C Nonfinancial performance or condition Yes Yes Yes Behavior Yes Yes Yes Financial performance or condition Yes No Physical characteristics Yes No No Systems and Processes Yes No Yes Yes d. No Yes Yes No Yes 7. The characteristics for determining whether criteria are suitable include: a. b. Relevance Yes Yes Reliability Yes Yes Completeness Yes Yes Neutrality Yes No Comparability Yes Yes Feedback value Yes No Understandability Yes Yes C Yes Yes No No No No Yes d. Yes Yes Yes Yes No No Yes Page 1 of 5 8. The assurance that is given on the absence of any indication to the contrary A Absolute B Reasonable C. Limited D. None 9. Which of the following is not one of the five elements of an assurance engagement? A. Written report B. Assurance file C. Subject matter D. Suitable criteria 10. A practitioner's assurance report contains the following conclusion: "Based on our work described in this report, nothing has come to our attention that causes us to believe that internal control is not effective, in all material respects, based on ABC criteria." What type of assurance engagement was performed? A Reasonable assurance engagement B. Positive assurance engagement C Negative assurance engagement D. Limited assurance engagement 11. 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 evaluation or measurement B. The representation of the responsible party that has performed the evaluation or measurement of the subject matter is not available to the intended user. C. The subject matter information is in the form of an assertion by the responsible party that is made available to the intended users. D. The subject matter information is provided to the intended users in the assurance report. 12. An assurance engagement should exhibit the following elements except A. A conclusion B. A subject matter CA three-party relationship D. Appropriate professional fee 13. Assurance engagement involve: A Three separate parties: a professional accountant, intended users, and responsible party B. Two separate parties: a professional accountant and a responsible party C. Two separate parties: a professional accountant and intended users D. Two separate parties: a responsible party and intended user 14. Which of the following is incorrect regarding the three-party relationship" element of assurance engagements A The responsible party is the person or persons, either as individual or representative of an entity, responsible for the subject matter B The responsible party and the intended user will often be from separate organization but need not be C. The intended users the person or class of persons for whom the professional accountant prepares the report for a specific user or purpose. D. Professional accounts as those persons who are members of an IFAC member body, which should be in public practice 15. Which of the following statements is incorrect regarding the three party relationship element of an assurance engagement? The responsible party and the intended user will often be from separate organization The responsible party is generally the addressee of the professional accountant report C. The responsible party may also be one of the intended users Page 25 D. The responsible party may not be the party who engages the professional accountant 16. In an assurance engagement, the person or persons, either as individuals or representatives of an entity, responsible for the subject matter is the A. Client B. Intended user C. Practitioner D. Responsible party 17. In an assurance engagement, the person or class of persons for whom the professional accountant prepares the report for a specific use or purpose is the A Client B. Intended user C Practitioner D. Responsible party 18. These are independent professional services that improve the quality of information for decision-makers, such as management and external users. A Assurance services B Audit services C. Attestation services D. Management consulting 19. Which of the following is not an element of assurance engagements? A. Subject matter B. Engagement process C. Evidence D. Suitable criteria 20. The person, or class of persons, whether as individuals or representatives of an entity, responsible for the subject matter. A Professional accountant B. Responsible party C. Intended users D. None of the answers 21. Which of the following forms may the subject matter of an assurance engagement take? A. Historical and prospective financial information B. Systems and processes C. Behavior D. All of them 22. These are the standards or benchmarks used to evaluate or measure the subject matter of an assurance engagement: A Criteria B. Engagement process C. Assertions D. Generally accepted auditing standards 23. In performing an assurance engagement, a professional accountant typically: A. Supplies litigation support services B. Assesses control risk at a low level C Expresses a conclusion about an assertion D. Provides management consulting advice 24. The three common-sought types of assurance services are: A. Audits, review, and compilations B. Audits, compilations, and other assurance C. Reviews, compilations and other assurance service D. Audits, reviews and other assurance services 25. Which of the following statements is incorrect? A Assurance services reports on the quality of information B. Assurance engagements encompass attestation engagements C. All engagements performed by professional accountants are assurance engagements D. Non-assurance engagements include agreed-upon procedures, compilation of financial or other information and tax consulting 5. Absolute assurance is generally not attainable as a result of such factors as: A. The use of selective testing B. The inherent limitations of control system C. The use of judgment D. All of these 7. Which of the following is an assurance engagement? A Compliance audits B. Agreed-upon procedures engagement C. Management consulting, D. Preparation of tax returns where no conclusion is expressed 8. This engagement involves the application of accounting expertise, as opposed to auditing expertise, in collecting, classifying and summarizing financial information: A. Compilation B. Agreed-upon procedures C. Tax consulting D. Management consulting 9. In an assurance engagement, the responsible party and the intended users A. Should be from different entities B. Should be from the same entities C. May be from the same entity or different entity D. Are both responsible for determining the nature, timing and extent of the procedures to be performed 0. The subject matter of an assurance engagement may include: Financial Internal Compliance with Information Control Regulation A Yes Yes Yes B. No No No C. Yes No Yes D. No Yes No