ICAEW ACA Assurance Certificate Level (Questions + Answers) Verified 100% Correct!!.

What is the mnemonic for the 5 key elements of assurance engagements? - Answer-CREST What does CREST stand for? - Answer-Criteria, Report, Evidence, Subject Matter, Three Party Relationship How many levels of assurance are there? - Answer-2 What are the characteristics of a reasonable assurance? - Answer-More detailed evidence, only used for statutory audits, gives a true and fair view, positive expression What are the characteristics of a Limited assurance? - Answer-Evidence gathered is limited, negative expression What do we mean by 'true' in audits? - Answer-factual and conforms to reality What do we mean by 'fair view' in audits? - Answer-free from discrimination and bias Who cannot do an audit? - Answer-employee or partner of employee, partner in partnership and being the auditor in a directly related company Name the benefits of assurance? - Answer-credibility of info, deterrent of fraud, draws attention to deficiency, lead to effective economic markets Name the limitations of assurance? - Answer-Sampling, Accounting systems have limitations, human factor, evidence is persuasive, some info is based on estimates What is the expectation gap? - Answer-the difference between what the public thinks the auditor is doing and what the auditor is doingAdvertising for a new client, how? - Answer-tender or advertise within the guidelines set out What is the mnemonic for appointment considerations? - Answer-MANICS What is M in manics? - Answer-management information (if the directors are unknown then extra enquiries will need to be made) What is A in manics? - Answer-Adequate resources What is N in manics? - Answer-Nature of engagement (perform risk assessment procedures) What is I in manics? - Answer-Identification (procedures performed under Money Laundering Regulations) What is C in manics? - Answer-Communicate with previous auditor What is S in manics? - Answer-Stability What is due diligence? - Answer-see whether the client is high or low risk What must accounting firms do to undertake 'client due diligence'? - Answer-Get documentation for individuals or info from registrar of companies for a firm. Also, get shareholder and director info What should the new auditors do first after acceptance? - Answer-Make sure that the previous auditor has been properly removed What is the mnemonic for the things that must be included in an engagement letter? - Answer-SARD - scope, auditors' responsibilities, report to management, directors' responsibilities