Audit & Assurance questions correctly answered to pass 2023 graded A+ PASSED

Audit & Assurance questions correctly answered to pass 2023 graded A+ PASSED What is an assurance engagement? - correct answer An assurance engagement typically provides improved or additional information that enhances stakeholders' confidence in the organisation and may also allow senior management to make better decisions. What is audit? - correct answer Audit is the systematic process of obtaining, and then objectively evaluating, the accounts or financial records of an organisation. What is reasonable assurance? - correct answer As per ISA 200: Reasonable assurance is a high level of assurance. It is obtained when the auditor has obtained sufficient appropriate audit evidence to reduce audit risk (that is, the risk that the auditor expresses an inappropriate opinion when the financial statements are materially misstated) to an acceptably low level. Why can absolute assurance not be given? - correct answer There are inherent limitations of an audit which result in most of the audit evidence on which the auditor draws conclusions and bases the auditor's opinion being persuasive rather than conclusive. Limitations are aspects such as... What is a positive opinion? - correct answer A positive opinion is where the auditors state that they have found something to be the case. We can express a positive opinion when we have reasonable assurance. What is limited assurance? - correct answer Limited assurance is a lower (but still meaningful) level of assurance that the risk of material misstatement has been reduced to an acceptable level, enabling a conclusion to be expressed negatively What is a negative opinion? - correct answer A negative opinion is where the auditors state that they have seen nothing to indicate that something is not the case.