5!"Floor®MFFIBuilding 13 Gor. R. Papa and S. Loyola Sis. ReSA a Sampaloe Mania Few F Accs , 3 -3989 / (0910) 439-13 The ReviewSchool of Accountancy aca ea eso) 132) UDITING THEORY Jose M.Treneo:Fermin D. Yabut x AT-01: FUNDAMENTALS OF AUDITING AND ASSURANCE SERVIC REQUIRED READINGS ilppie Framework for Assurance Engagements (PFAE) Psxtsodorersed)~ Assurance Engegerens Gores Man Audits or Revews of Histor Fnancol Statements ‘+ Chapter 1, Auditing and Assurance Principles, 1: Edition + PSA Glossary of Terms Aognesagement in which a practitioner expresses @ conclusion designed to enhance the Seares (of confidence of the intended users other than the responsible party shout tre oe of the evaluation or measurement of a subject matter against criteria Assurance engagement C. Audit engagement Attestation engagement D. Management consulting engagement ch, the following is NOT an element ofan assurance engagement? Sufficient appropriate eviden: C." A subject matter @ Appropriate professional fees D. Awritten assurance report > Tp person, persons or class of persons for whom the practioner prepares the assurance report, ‘A. General public Audit committee 8. Responsible party Intended users A cna’ (9 the TAASB Glossary of terms, this refers toa professional accountant in public practice A. Auditor ® Practitioner C. Public accountant, Professional 5 The Person or persons who in a direct reporting engagement, is responsible for the suect Inne OF int an “assertion-based engagement, me Fesponsible for the subject matter information (the assertion), and may be responsible for the Subject matter. A... General public C. Audit committee Responsible party D. Intended users & Which of the following forms may the subject matter of an assurance engagement take? 1” Financial performance or conditions Non-financial performance or conditions Physical characteristics Systems and processes Behavior Tand 1 © 1, Mand iv Land tr 11, 11, 1 andy 7 Falevants bene jBechinarks used to evaluate or measere event, benchmarks for presentation and disclosure, A. Assertions 8. Engagement process 8. In an assurance engagement, this reste the information obtained b arriving at the conclusions which the conciys Y the Practitioner " a. Chtera @ Evidence, OPM is based peak Assertions D, PSAs ” Teale aly the conclusion expressed in an assurs,« egret the con a © engagement may provide the following * Reasonable level of assurance fe + Limited level of assurance re * Absolute level of assurance. No 10. Absolute assurance 's generally not attainableas a result “ NG The use of selective testing Yes ie syhe inherent umitations of internal control Yes x ‘\Much of the evidence available to the tes, ‘NeviewSchool of AccountancyReSk: The ReviewSchoal of Accountancy ices, surance Se ReSA: Treony: Fundamentals of Musing 206 RS yee | practitioner is persuasive rather th3P ves ves «NOYES conclusive / « Tieuse of Judginent in gathering an The usfing evidence and forming conclusto’ ‘ed on that evidence practitioner's conclusion —ecegement risk to a reve! that is acceptable in the 6) Thre alm so reduction n assurance S100 ment risk t etic circumree engagement, as the basis [or Cnegative, form p G_ None of the choices apply Which of the following statements exempt sGositive ie Sree yur work described in ths report eating has come ttt SoST that vases oreo believe that internal control is not effective, 16 ‘ail material respects, based on XYZ criteria.” ¢. Both Aand B D, Neither A nor B oe NCSL cathe trees commoniy-sought types of assurance services ae’ EE ay end compBtons. ited level of assurance about the client's historical limited level, 14, This assurance engagement provides a. financial statements & Financial statements audit Review of historteat'tinancial statements. Forecasts and projections. D. Agreed-upon procedures. 15, Which of the following is an objective of a review éngagement? iri of te Following oo colson thatthe financial information i presented In Coton, sath generally accepted accounting pricpes Expressing 2 limited assurance to users wi performed by the CPA. © Repetin wether mate moaticstons shouldbe made o such tance semen’ Saag ae eteyorm with generally accepted aecourting principles Cara nace qnancie statements in ll material respects, fry present the Rrpecial position and operating resus ofthe client es that will be 16. Which of the following procedures ordinarily performed during an audit are also performed In a review engagement? ‘A. Assessment of accounting and internal control systems, B. Tests of controls. sts of records and responses to inquiries. Inquiry and analytical procedures. 17. Procedures in a review engagement consist primarily of inquiry and analytical procedures. Regarding review procedures, which of the following statements is correct? ‘A. Tlie auditor should not apply the same materiality considerations as would be applied if an audit opinion on the financial statements were given. The judgment asi to\whet is material is not made by reference to the information on whicl uditor is reporting an needs of those Qn that nici tne auelioa slrenertola the needs of those relying on that information, not There is a greater risk that misstatements will not be de review. ect ed in an audit than in a (GB) ieconeneteateei asm treecer re extent of review procedures. aes ea 18. This fs the risk that the nat the prastitionar expres matter information 1s materially misstate an inappropriate conclusion when the subject ReSAS735-9807 / 734-3989 / (0910) 439-1320 Page 2 of age 2 of 3ReSA: The ReviewSchool of Accountancy AT-01 Auditing Theory: Fundamentals of Auditing and Assurance Services n tsk Audit risk Horan etection rls ssurance engagement risk ~ Paciener 4 Soi ractitioner’s risk . sestmeHlGeaases? . Which of the following best describes risk assessiment services 7° An engagement which provides assurance about whether financial and non-financial information being reported from the entity's performance measurement system is reliable. 5. An engagement which involves the evaluation of the quality ofhealth car, medical services and looks into the health care detivery system. ©. 4n engagement which identifies a se: of risks that affect the cent organization. It Involves the study of the iink between risks and the vision, mission, objectives and strategies and ihe development of new and relevant measures. D. None of the answers 20. Which of the following best describes business performance measurement? A. An engagement which identifies a Set of risks that affect the client organization, It involves the study of the link between. risks and the organization’s vision, mission, objectives and strategies and the development of new and eleva nee @ Ae engagement which provides assurance about whether tierce seer finance information being reported from the entty's performance messurer an a eal reliable. © Etbagerent which involves the evaluation of the quality of health care, medical Services and looks into the health care delivery sate ©. None of the answers. -end of AT-01- 9807 / 734-3989 / (0910) 439.1329