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ACCA - Audit and Assurance (AA)
Questions and Correct Answers/ Latest
Update / Already Graded
Objective of an external audit
Ans: The objective of an audit of financial statements is to
enable the auditor to express an opinion on whether the
financial statements are prepared, in all material respects, in
accordance with applicable financial reporting framework. An
audit of financial statements is an example of an assurance
engagement.
Advantages of a non-statutory audit
Ans: It can provide a means of settling accounts between the
partners.
Where audited accounts are available this may make the
accounts more acceptable to taxation authorities.
The sale of the business or the negotiation of loan or overdraft
facilities may be facilitated if the firm is able to produce
audited accounts.
An audit on behalf of a sleeping partner is useful since generally
such a personal have you have a means of checking the
accounts of the business or confirming the share of profits due
to them.
All rights reserved © 2025/ 2026 |
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Accountability
Ans: The quality or state of being accountable; that is, being
required or expected to justify actions and decisions. It
suggests an application or willingness to accept responsibility
for one's actions.
Stewardship
Ans: Refers to the duties and obligations of a person who
manages another persons property.
Agents
Ans: Are people who are employed or used to provide a
particular service. In the case of a company, the people being
used to provide the service or managing the business also have
the second role of trying to maximise their personal wealth in
their own right.
Assurance engagement
Ans: A practitioner that aims to obtain sufficient appropriate
evidence in order to express a conclusion designed to enhance
the degree of confidence of the intended users other than the
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responsible party about the outcome of the measurement or
evaluation of an underlying subject matter against criteria.
Elements of an assurance engagement
Ans: A three party relationship. The three parties are the
intended user, the responsible party and the practitioner.
A subject matter, where the data to be evaluated has been
prepared by the responsible party. It can take many forms,
including the financial performance, non-financial performance,
process and behaviour.
Suitable criteria, where the subject matter is evaluat ed or
measured against criteria in order to reach an opinion.
Evidence, where sufficient appropriate evidence needs to be
gathered to support the required level of assurance.
An assurance report, where a written report containing the
practitioners opinion is issued to the intended user in the form
appropriate to reasonable assurance engagement or a limited
assurance engagement.
Intended users
Ans: The individual or organisation, or group thereof that the
practitioner expects will use the assurance repot.
All rights reserved © 2025/ 2026 |
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Reasonable party
Ans: The party responsible for the underlying subject matter.
Practitioner
Ans: The individual conducting the engagement which will
usually be the engagement partner or other members of the
engagement team, or as applicable, the firm.
Objective of a reasonable assurance engagement
Ans: Is a reduction in assurance engagement risk to an
acceptably low level in the circumstances of engagement as the
basis for the insurance practitioners conclusion. The concl usion
would usually be expressed in a positive forum.
Objective of a review engagement
Ans: Is obtain limited assurance about whether the subject
matter information is free from material misstatement.
An attestation engagement
Ans: Where underlying subject matter has not been measured
or evaluated by the practitioner, and the practitioner concludes
All rights reserved © 2025/ 2026 |
ACCA - Audit and Assurance (AA)
Questions and Correct Answers/ Latest
Update / Already Graded
Objective of an external audit
Ans: The objective of an audit of financial statements is to
enable the auditor to express an opinion on whether the
financial statements are prepared, in all material respects, in
accordance with applicable financial reporting framework. An
audit of financial statements is an example of an assurance
engagement.
Advantages of a non-statutory audit
Ans: It can provide a means of settling accounts between the
partners.
Where audited accounts are available this may make the
accounts more acceptable to taxation authorities.
The sale of the business or the negotiation of loan or overdraft
facilities may be facilitated if the firm is able to produce
audited accounts.
An audit on behalf of a sleeping partner is useful since generally
such a personal have you have a means of checking the
accounts of the business or confirming the share of profits due
to them.
All rights reserved © 2025/ 2026 |
, Page |2
Accountability
Ans: The quality or state of being accountable; that is, being
required or expected to justify actions and decisions. It
suggests an application or willingness to accept responsibility
for one's actions.
Stewardship
Ans: Refers to the duties and obligations of a person who
manages another persons property.
Agents
Ans: Are people who are employed or used to provide a
particular service. In the case of a company, the people being
used to provide the service or managing the business also have
the second role of trying to maximise their personal wealth in
their own right.
Assurance engagement
Ans: A practitioner that aims to obtain sufficient appropriate
evidence in order to express a conclusion designed to enhance
the degree of confidence of the intended users other than the
All rights reserved © 2025/ 2026 |
, Page |3
responsible party about the outcome of the measurement or
evaluation of an underlying subject matter against criteria.
Elements of an assurance engagement
Ans: A three party relationship. The three parties are the
intended user, the responsible party and the practitioner.
A subject matter, where the data to be evaluated has been
prepared by the responsible party. It can take many forms,
including the financial performance, non-financial performance,
process and behaviour.
Suitable criteria, where the subject matter is evaluat ed or
measured against criteria in order to reach an opinion.
Evidence, where sufficient appropriate evidence needs to be
gathered to support the required level of assurance.
An assurance report, where a written report containing the
practitioners opinion is issued to the intended user in the form
appropriate to reasonable assurance engagement or a limited
assurance engagement.
Intended users
Ans: The individual or organisation, or group thereof that the
practitioner expects will use the assurance repot.
All rights reserved © 2025/ 2026 |
, Page |4
Reasonable party
Ans: The party responsible for the underlying subject matter.
Practitioner
Ans: The individual conducting the engagement which will
usually be the engagement partner or other members of the
engagement team, or as applicable, the firm.
Objective of a reasonable assurance engagement
Ans: Is a reduction in assurance engagement risk to an
acceptably low level in the circumstances of engagement as the
basis for the insurance practitioners conclusion. The concl usion
would usually be expressed in a positive forum.
Objective of a review engagement
Ans: Is obtain limited assurance about whether the subject
matter information is free from material misstatement.
An attestation engagement
Ans: Where underlying subject matter has not been measured
or evaluated by the practitioner, and the practitioner concludes
All rights reserved © 2025/ 2026 |
