TESTBANK FOR
Auditing and Assurance
Principles
Jose M. Ireneo Shirley
C. Ireneo George R. James
,Chapter 1: Fundamentals of Assurance Services
●Summary of Leaning Objectives
1. Appreciate why it is imperative for students to take up Auditing
● The application of auditing concepts learned in this course will enable a student to sharpen logic
and evidence gathering skill which are necessary in today’s business world. The
demand for audits will continue way into the distant future. As long as there is a need for
reliable and fairly stated information, CPAs will continue to provide audits.
,2. Define assurance and assurance engagements and give examples.
● Assurance
✓ Refers to the auditors satisfaction as to the reliability of an assertion being made by one party for
use by another party.
● Assurance engagements
✓ Are three-party contracts in which assurers (such as a CPA) reports on the quality of
information.
✓ Include assertion-based services such as audits and review of financial statements,
and direct reporting engagements
, 3. Discuss the Five elements of assurance engagements
● Every assurance engagements has five elements:
a) A three party relationship involving a practitioner (CPA), a responsible party, and intended
users
b) An appropriate subject matter
c) Suitable criteria
d) Sufficient appropriate evidence, and
e) A written assurance report in the form appropriate to a reasonable assurance engagement or a
limited assrance engagement.
Auditing and Assurance
Principles
Jose M. Ireneo Shirley
C. Ireneo George R. James
,Chapter 1: Fundamentals of Assurance Services
●Summary of Leaning Objectives
1. Appreciate why it is imperative for students to take up Auditing
● The application of auditing concepts learned in this course will enable a student to sharpen logic
and evidence gathering skill which are necessary in today’s business world. The
demand for audits will continue way into the distant future. As long as there is a need for
reliable and fairly stated information, CPAs will continue to provide audits.
,2. Define assurance and assurance engagements and give examples.
● Assurance
✓ Refers to the auditors satisfaction as to the reliability of an assertion being made by one party for
use by another party.
● Assurance engagements
✓ Are three-party contracts in which assurers (such as a CPA) reports on the quality of
information.
✓ Include assertion-based services such as audits and review of financial statements,
and direct reporting engagements
, 3. Discuss the Five elements of assurance engagements
● Every assurance engagements has five elements:
a) A three party relationship involving a practitioner (CPA), a responsible party, and intended
users
b) An appropriate subject matter
c) Suitable criteria
d) Sufficient appropriate evidence, and
e) A written assurance report in the form appropriate to a reasonable assurance engagement or a
limited assrance engagement.
