Jerah Y.

Torrejos
ACP314 (5008)
1. What is the purpose of assurance engagement? (5 sentences)
Assurance engagement is done to evaluate or measure subject matter
provided by the responsible party against criteria. The auditor express conclusion
that will provide the intended user a level of assurance about the subject matter. It
increases the confidence of the user to use the information in making decisions. It
also lowers the risk of the users when using the said information. Assurance
engagement minimizes the chance of information given by the responsible party
being incorrect.
2. What are the 5 elements of Assurance Engagements (CREST)? Explain each in
2-3 sentences.

The Five Elements of Assurance are Criteria, Report, Evidence, Subject

Matter, and Triparty.
 Criteria- Criteria are the standard which the auditor used to judge the
reliability and accuracy of a subject matter supplied by the responsible party.
It is known as a benchmark to evaluate or measure the subject matter.
International Financial Reporting Standards is an example of this.
 Report- Report contains the conclusion of the auditor. The report must be
presented in an appropriate form.
 Evidence- Sufficient and appropriate evidence is used by the auditor to arrive
at a conclusion. Suitable evidence is obtained by performing audit procedures
and by reviewing financial statements.
 Subject Matter- Subject matter is the subject that is under the scrutiny of the
auditor. It is the subject that is measured against the criteria.
 Triparty- Triparty refers to the relationship of the three parties involved in the
assurance engagement. The three parties are the responsible party, the
practitioner, and the user.

3. What is Professional skepticism? (3 sentences)

Professional Skepticism is the attitude of the auditor that does not believe
easily on what they are told, instead they gather substantial evidence to draw
conclusions. Auditors have questioning minds that will probe questions and critically
assess the evidence. Professional skepticism allows auditors to be alert to potential
errors in the subject matter.
References:
The five elements of an assurance engagement. (n.d.). Retrieved September 01, 2020,
https://www.icaew.com/technical/audit-and
assurance/assurance/process/scoping/assurance-decision/the-five-elements

Lord, S. (2018, October 25). The enduring importance of professional skepticism.

Retrieved September 02, 2020,
https://www.accountingtoday.com/opinion/the-enduring-importance-of-professional-
skepticism-in-auditing

Professional scepticism and other key audit issues. (n.d.). Retrieved September 02, 2020,
https://www.icaew.com/technical/audit-and-assurance/professional-
scepticism/professional-scepticism-videos