CA INTER TEST - CHP 1 - Total marks 25

Which element is not a part of an assurance engagement?

• Sufficient appropriate evidence
• A written assurance report
• Financial ratios of the organization
• Suitable criteria

Which of the following is true regarding “reasonable assurance”?

• It is a complete guarantee of error-free financial statements
• It is a low level of assurance provided by an auditor
• It is a high level of assurance that reduces audit risk to an acceptable level
• It includes an investigation into all fraudulent activities

Which characteristic of auditing ensures credibility to financial statements?

• Independence of the auditor
• Verification of all financial transactions
• Compilation of financial data
• Supervision of accounting practices

What does SA 240 primarily address?

• The auditor’s responsibility for detecting fraud
• The method of conducting substantive testing
• Communication with those charged with governance
• Reporting on compliance with laws and regulations

Which of the following is NOT an advantage of audit?

• It provides high-quality financial information
• It acts as a moral check on employees.
• It enhances risk of management bias.
• It helps in safeguarding interests of shareholders.

Which of the following is NOT TRUE about an assurance engagement?

• It relates to providing assurance about historical financial information only
• The practitioner obtains sufficient appropriate evidence.
• There is some information to be examined by the practitioner
• A written assurance report in appropriate form is issued by the practitioner

Which of the following is TRUE about Engagement Standards?

• Engagement standards ensure proper rights to practitioners in the course of their duties
• Engagement standards ensure preparation and presentation of financial statements in a standardized manner.
• Engagement standards ensure uniformity by practitioners in the course of their duties
• Engagement standards ensure savings in resources of clients.

Find the odd one out

• SAE 3400 The Examination of Prospective Financial Information
• SAE 3402 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus
• SRS 4400 Engagements to perform agreed-upon procedures regarding financial information
• SRS 4410 (Revised) Compilation engagements

Which of the foll. is not a type of assurance engagement

• Audit Engagements
• Review Engagements
• Examination of Prospective Financial Information
• Compilation Engagements

Which of the following is not an element of assurance engagement?

• 3 parties - Responsible party, client, Practitioner
• Written report
• Suitable criteria
• Sufficient Appropriate Evidence