Week 1 Flashcards
(9 cards)
What is an assurance engagement?
- when a practitioner gathers enough reliable evidence to give a conclusion that helps intended users (not including the person or group being checked) feel more confident about how a subject matter was evaluated using certain standards or criteria
What are the five main elements of an assurance engagement?
- Three-party involvement
- appropriate subject matter
- suitable criteria-
- sufficient appropriate evidence
- written assurance report in an appropriate form
What are the three parties involved in three party involvement?
- practitioner (e.g. auditor)
- intended users (e.g. shareholders)
- responsible party (e.g. directors)
What the relevance of appropriate subject matter regarding assurance engagement?
- The information subject to examination by the practitioner
- e.g. financial statements
What is the relevance of suitable criteria regarding assurance engagement?
- the subject matter is evaluated against the suitable criteria
- financial reporting framework
What is the relevance of sufficient appropriate evidence regarding assurance engagement?
sufficient appropriate evidence is needed to provide a basis for the opinion/conclusion
- e.g. sufficient appropriate evidence obtained by performing audit procedures
What is the relevance of a written assurance report in an appropriate form regarding assurance engagement?
The output of the assurance engagement expressing a conclusion/opinion about the subject matter
- e.g. independent auditor’s report providing an opinion as to whether the financial statements give a true and fair view
What are some examples of assurance engagements?
- audit of financial statements
- review of financial statements
- systems reliability reports
- verification of social and environment information
- review of internal controls
- value for money audit in public sector organisations
