ACA Assurance - Chapter 1 - Concept and Need for Assurance Questions & Answers Already Graded A+

Definition: Assurance - Answer-An assurance firm's satisfaction as to the reliability of an assertion being made by one party for the use of another party. Identify: 5 Key Elements of an Assurance Engagement (Hint: Three Sweet Cows Eating Raisins) - Answer- 1. Three party relationship (user, responsible party & practitioner) 2. Subject matter 3. Suitable criteria 4. Evidence 5. Written Report Explain: Difference between the 2 levels of assurance - Answer-1. Reasonable assurance - (Highest level) Sufficient & appropriate evidence, positive opinion i.e. FS show a true and fair view... 2. Limited assurance - (Lowest level) Sufficient & appropriate evidence - not as much needed, negative conclusions i.e. nothing has come to our attention... Identify: Assurance Engagements Required by Regulators - Answer-- Bank Audits - Pension Scheme Audits - Charity Audits - Solicitor's Audits Explain: The Companies Act 2006 requires that auditors are members of a RSB (Recognised Supervisory Body) e.g. ICAEW. What is the RSB responsible for ensuring? - Answer-1. Only individuals holding an appropriate qualification/firms control by qualified persons can conduct audits 2. Those individuals or firms are monitored on a regular basis. Identify: The Stages of an Audit - Answer-1. Obtaining the engagement 2. Planning3. Performing procedures 4. Review and completion 5. Reporting