FUNDAMENTALS OF ASSURANCE ENGAGEMENTS (Multiple Choice Questions) 1.

These are independent

professional services that improve the quality of information for decision-making. a. Management
consultancy b. Audit services c. Assurance services d. Attestation services 2. Which of the following
statements best describes assurance services? a. Independent professional services designed to express
an opinion on the fairness of historical financial statements based on the results of an audit. b. Services
that requires the preparation of financial statements or the collection, classification, and summarization
of other financial information. c. Independent professional services that are intended to enhance the
credibility of information to meet the needs of an intended user. d. Independent professional services
designed for the improvement of operations, resulting in better outcomes. 3. Which of the following
best describes the objective of an assurance engagement? a. To compare the company's information
and policies to those of other entities. b. To improve the company's outcomes. c. To enhance the
credibility of information in order to improve the likelihood that the information will meet the needs of
an intended user. d. None of the above. 4. The degree of certainty that the practitioner has attained and
wishes to convey is: a. A conveyance. b. An assertion. c. A declaration. d. An assurance. 5. What level of
assurance is provided by the auditor in an audit engagement? a. Positive level of assurance b. High, but
not absolute, level of assurance c. Moderate assurance d. High level of assurance 6. The level of
assurance provided by an audit of detecting a material misstatement is referred to as: a. Positive
assurance. b. High assurance. c. Reasonable assurance. d. Negative assurance. 7. Of the following, which
is the broadest concept? a. Internal control audit. b. Audit of financial statements. c. Attestation
services. d. Assurance services. 8. In performing attestation services, a CPA will normally: a. Recommend
uses for information. b. Improve the quality of information, or its context, for decision makers. c.
Perform market analyses and cost estimates. d. States a conclusion about a written assertion. 9. Which
of the following is the single feature that most clearly distinguishes auditing, attestation, and assurance:
a. CPA's approach to the service. b. Type of service. c. Scope of services. d. Training necessary to
perform the service. 10. Which of the following services provides the highest level of assurance to third
parties about a company's AT – Fundamentals of Assurance Engagements (MCQs) Red Sirug Page 2
financial statements? a. Audit. b. Review. c. Compilation. d. Each of the above provides the same level of
assurance. 11. For assurance engagements regarding historical financial information, reasonable
assurance engagements are called: a. Review engagements. b. Audit engagements. c. Compilation
engagements. d. Agreed-upon procedures engagements. 12. In some assurance engagements, the
evaluation or measurement of the subject matter is performed by the responsible party, and the subject
matter information is in the form of an assertion by the responsible party that is made available to
intended users. These engagements are called a. Recurring engagements b. Non-assurance
engagements c. Direct reporting engagements d. Assertion-based engagements 13. The following are
characteristics of "direct reporting" assurance engagements, except a. The practitioner either directly
performs the evaluation or measurement of the subject matter or obtains a representation from the
responsible party that has performed the evaluation or measurement. b. The subject matter information
is in the form of an assertion by the responsible party that is made available to the intended users. c.
The representation of the responsible party that has performed the evaluation or measurement of the
subject matter is not available to the intended users. d. The subject matter information is provided to
the intended users in the assurance report.