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: