Q5- Principles Of Auditing (ICAN ATSWA Sept 2021 Insight)

    

Question 5:

Which of the following is NOT an example of assurance engagements?  

A. A statutory audit 

B. Reports of corporate social responsibility performance 

C. Reports on environmental performance 

D. Reports for lenders and other investors 

E. Reports on statements of accounting policies   

The correct answer is (E)

Past Question Review:

An assurance engagement performed by a  professional will consist of the following five elements:

• A  tripartite  relationship consisting  of  the  professional  accountants  that  provided the services;  the directors  or  responsible  officers  that  prepared  the financial statements;  and the  users  of  the  assurance  report  e.g. shareholders, tax  office  and the researcher. 

• The  subject matter:  This  is  the financial  statements  or  cash  flow  forecast  prepared by  the  responsible  officer  for  the  professional  accountants  to  review. 

• The suitable criteria:   These are  ‘the  rules’  against which  the  subject matter  is evaluated in order  to reach an opinion  e.g. CAMA,  IFRS  and  ISA. 

• The  Evidence:   This  refers  to all  material  information used by  the  professional accountant  to arrive  at  his/her  opinion. 

• The Assurance  Report: This  is  the  written report  containing  the  professional accountant’s  opinion presented to the  users. 

Auditors however,  have  intimate  knowledge  of  the  operations  of  companies  and some  other business  organisations.  An auditor, acting  in  his  capacity  as  a trained  accountant,  may  be called upon to perform  a  wide  range  of  services  other  than  auditing  to existing  and prospective clients. These services  include: 

• Accounting  services 
• Taxation  matters
• Liquidation, receivership and trusts 
• Advising  companies  seeking  quotation on the  Nigerian Stock Exchange. 
• Assisting  companies  to  prepare  feasibility  reports 
• Providing  advice  on  establishing  staff  pension schemes 
• Secretarial  services 

In non-assurance services or engagements, they issue reports that do not express an opinion or conclusion on the subject matter

The correct answer is (E)

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