ACA Assurance Exam Material – Audit Strategy,
Evidence, and Audit Reports
Description: This resource provides exam-focused ACA assurance material with
correct answers. It covers audit strategy, forms of audit evidence, ISA reporting
requirements, and professional ethics. The content is highly relevant for ACA
assurance candidates preparing for examinations on assurance and auditing
principles.
Reasonable Assurance engagement 1. Evidence Sought 2. Opinion Given 3. Example -
answer✔✔1. Sufficient and Appropriate 2. Positive Opinion 3. The financial
statements show a true and fair view in all material respects Limited Assurance
engagement 1. Evidence Sought 2. Opinion Given 3. Example - answer✔✔1.
Sufficient and appropriate (less intrusive) 2. negative conclusion 3. Nothing has come
to our attention that makes us believe that the subject matter is misstated
Stakeholders - Benefits of audit and assurance - answer✔✔- enhances credibility
of information being reported - reliable information to hold management to account
- draws attention of user to any deficiencies Directors - Benefits of audit and
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assurance - answer✔✔- reduces management bias - deter fraud - enhances
, reliability of information being reported on - management letter contains
constructive advice on internal controls Customers and Suppliers - Benefits of audit
and assurance - answer✔✔- helps determine whether they should trade with the
company lenders / banks - Benefits of audit and assurance - answer✔✔- business
is scrutinised by another set of eyes - gives added confidence to lenders, making it
easier for companies to raise finance Employees - Benefits of audit and assurance -
answer✔✔- confidence over job security - confidence over bonuses payable if
linked to profits Society - Benefits of audit and assurance - answer✔✔- ensures
high quality, reliable information, circulates in the market - helps to improve
company's reputation - additional assurance to 3rd parties such as tax authorities
The audit threshold - answer✔✔- no more than 50 employees - company turnover
does not exceed £10.2m - company gross assets do not exceed £5.1 m Audit has to
be carried out for a small company if - answer✔✔- articles of association require
one - shareholders who own 10% or more ask for one - company is a public company
- company is involved with insurance or banking Nature of work - Audit Engagement
1. ISA 2. Example 3. procedures performed 4. type of assurance issued 5. opinion /
conclusion - answer✔✔1. ISA 500 (UK) 2. audit of year end financial statements 3.
Analytical procedures, enquiry, inspection, overvation, re-calculation, re-
performance, external confirmation, written representations 4. Reasonable
assurance engagement 5. positive opinion - the financial statements give a True and
Fair view Nature of work - Other Assurance Engagement 1. ISRE / ISAE 2. Example 3.
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Evidence, and Audit Reports
Description: This resource provides exam-focused ACA assurance material with
correct answers. It covers audit strategy, forms of audit evidence, ISA reporting
requirements, and professional ethics. The content is highly relevant for ACA
assurance candidates preparing for examinations on assurance and auditing
principles.
Reasonable Assurance engagement 1. Evidence Sought 2. Opinion Given 3. Example -
answer✔✔1. Sufficient and Appropriate 2. Positive Opinion 3. The financial
statements show a true and fair view in all material respects Limited Assurance
engagement 1. Evidence Sought 2. Opinion Given 3. Example - answer✔✔1.
Sufficient and appropriate (less intrusive) 2. negative conclusion 3. Nothing has come
to our attention that makes us believe that the subject matter is misstated
Stakeholders - Benefits of audit and assurance - answer✔✔- enhances credibility
of information being reported - reliable information to hold management to account
- draws attention of user to any deficiencies Directors - Benefits of audit and
1
Page
assurance - answer✔✔- reduces management bias - deter fraud - enhances
, reliability of information being reported on - management letter contains
constructive advice on internal controls Customers and Suppliers - Benefits of audit
and assurance - answer✔✔- helps determine whether they should trade with the
company lenders / banks - Benefits of audit and assurance - answer✔✔- business
is scrutinised by another set of eyes - gives added confidence to lenders, making it
easier for companies to raise finance Employees - Benefits of audit and assurance -
answer✔✔- confidence over job security - confidence over bonuses payable if
linked to profits Society - Benefits of audit and assurance - answer✔✔- ensures
high quality, reliable information, circulates in the market - helps to improve
company's reputation - additional assurance to 3rd parties such as tax authorities
The audit threshold - answer✔✔- no more than 50 employees - company turnover
does not exceed £10.2m - company gross assets do not exceed £5.1 m Audit has to
be carried out for a small company if - answer✔✔- articles of association require
one - shareholders who own 10% or more ask for one - company is a public company
- company is involved with insurance or banking Nature of work - Audit Engagement
1. ISA 2. Example 3. procedures performed 4. type of assurance issued 5. opinion /
conclusion - answer✔✔1. ISA 500 (UK) 2. audit of year end financial statements 3.
Analytical procedures, enquiry, inspection, overvation, re-calculation, re-
performance, external confirmation, written representations 4. Reasonable
assurance engagement 5. positive opinion - the financial statements give a True and
Fair view Nature of work - Other Assurance Engagement 1. ISRE / ISAE 2. Example 3.
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