Auditing: The Art and Science of Assurance Engagements, 15ce (Arens)
Chapter 1 The Demand for Audit and Other Assurance Services
1.1 Define an assurance engagement.
1) What is the nature of the service provided when an auditor evaluates information using
suitable criteria and issues a report that attests to the reliability of the information?
A) internal audit engagement
B) review engagement
C) compilation engagement
D) attestation engagement
Answer: D
Diff: 2
Learning Objective: 1-1 Define an assurance engagement.
2) The No-Name Agency conducts an independent service for a company to determine if its
suppliers have complied with health and safety regulations, child labour guidelines, and other
employee welfare issues. What type of service is No-Name providing?
A) assurance
B) attest
C) review
D) compilation
Answer: A
Diff: 2
Learning Objective: 1-1 Define an assurance engagement.
3) Which of the following is an example of an attestation engagement?
A) accounting and bookkeeping services for the accounts
B) an audit of internal controls over financial reporting
C) preparation of the annual financial statements with notes
D) completion of provincial and federal tax returns
Answer: B
Diff: 1
Learning Objective: 1-1 Define an assurance engagement.
4) When do individuals and organizations typically need assurance services?
A) usually only when organizations obtain debt or other loans
B) for five years from the start of an organization until debt is retired
C) only when historical data, such as financial information, need to be audited
D) whenever assurance is provided by a practitioner who is independent and unbiased
Answer: D
Diff: 2
Learning Objective: 1-1 Define an assurance engagement.
1
Chapter 1 The Demand for Audit and Other Assurance Services
1.1 Define an assurance engagement.
1) What is the nature of the service provided when an auditor evaluates information using
suitable criteria and issues a report that attests to the reliability of the information?
A) internal audit engagement
B) review engagement
C) compilation engagement
D) attestation engagement
Answer: D
Diff: 2
Learning Objective: 1-1 Define an assurance engagement.
2) The No-Name Agency conducts an independent service for a company to determine if its
suppliers have complied with health and safety regulations, child labour guidelines, and other
employee welfare issues. What type of service is No-Name providing?
A) assurance
B) attest
C) review
D) compilation
Answer: A
Diff: 2
Learning Objective: 1-1 Define an assurance engagement.
3) Which of the following is an example of an attestation engagement?
A) accounting and bookkeeping services for the accounts
B) an audit of internal controls over financial reporting
C) preparation of the annual financial statements with notes
D) completion of provincial and federal tax returns
Answer: B
Diff: 1
Learning Objective: 1-1 Define an assurance engagement.
4) When do individuals and organizations typically need assurance services?
A) usually only when organizations obtain debt or other loans
B) for five years from the start of an organization until debt is retired
C) only when historical data, such as financial information, need to be audited
D) whenever assurance is provided by a practitioner who is independent and unbiased
Answer: D
Diff: 2
Learning Objective: 1-1 Define an assurance engagement.
1
