UK Audit and Assurance
Which three of the following are key elements of a general assurance engagement?
a. A user
b. A subject matter
c. Suitable criteria
d. An assurance file
Which three of the following describe aspects of the expectations gap with respect to external audit?
a. Users do not understand the meaning of the audit opinion
b. Users are not aware of the limitations of the audit process
c. Users do not appreciate that reasonable assurance is a low level of assurance
d. Users do not understand what the audit process involves
Which two of the following are limitations of the provision of assurance?
a. Assurance work is carried out by people independent of the entity
b. Sampling is used in assurance work
c. Client systems have inherent limitations
d. Unqualified staff may be used on assurance engagements
In any assurance engagement there are three parties involved- the responsible party, the practitioner and the user. In respect of any given subject matter state which party:
determines the suitable criteria?
a. User
b. Practitioner
c. Responsible Party
Provides an opinion on whether the subject matter complies with the criteria?
d. User
e. Practitioner
f. Responsible party
Which one of the following statements best describes the evidence obtained and the opinion given in a reasonable assurance engagement?
a. Sufficient and appropriate evidence and a negatively worded opinion
b. Sufficient appropriate evidence and a positively worded opinion
c. A lower level of evidence and a negatively worded opinion
d. A lower level of evidence and a positively worded opinion
For each of the following statements, select whether they are true or false
A statutory audit gives reasonable assurance that the financial statements give a true and fair view
A. True
B. False
A negative assurance conclusion gives a limited level of assurance
A. True
B. False
Reasonable assurance is absolute assurance of the correctness of the subject matter
A. True
B. False
Jones LLP is the external auditor of Blue PLC, a listed company. The directors of Blue PLC have requested that Jones LLP carry out a review engagement assessing the effectiveness of its corporate governance policies against the UK corporate governance code. For the above review engagement select which part of the engagement description constitutes the subject matter, suitable criteria and which party is the responsible party.
Subject matter
A. Blue PLC’s corporate governance policies
B. The UK Corporate Governance Code
Suitable criteria
A. Blue PLC’s corporate governance policies
B. The UK corporate governance code
Responsible Party
A. Jones LLP
B. The directors of Blue PLC
For each of the following statements relating to the provisions of the Companies Act 2006, select whether they are true or false.
An individual or firm is eligible for appointment as a statutory auditor if the individual or firm is a member of a recognised supervisory body and is eligible for appointment under the rules of that body.
A. True
B. False
A person may not act as statutory auditor of a company if that person is an officer of employee of the company
A. True
B. False
Which one of the following best describes the concept of assurance?
Assurance refers to
An assurance firm’s high level of satisfaction as to the reliability of an assertion being made by one party for the use of another party
An assurance firm’s satisfaction as to the reliability of an assertion being made by one party for the use of another party
A user’s satisfaction as to the reliability of the assertion being made by another party
An assurance firm’s limited level of satisfaction as to the reliability of an assertion being made by one party for the use of another party?