1.

Concept and need for assurance (CH1)

Hand note:

Year Q Question Mark Practice

No s (Yes/ No)
June 1 What is assurance engagement?
2011
Dec 9a Audit and Assurance are always used together. What is the exact difference
2011 between these?
Dec 2a Define assurance engagement
2013
June 1a Define assurance services, attestation services and auditing services with examples
2015
Dec 1a Define Assurance engagement in any audit function
2015
Dec 1c Define assurance engagement in an audit function.
2017
Year Q Question Mark Practice
No s (Yes/ No)
May 1b In addition to audit, users want some other assurance services. Give few examples.
2013
Self-Test:
Year Q Question Mark Practice
No s (Yes/ No)
June 3 You are an Accountant who has been approached by Mr. X, who wants to invest in
2010 company ABC Ltd. He has asked you for assurance whether the most recent
financial statements of company ABC Ltd. are a reliable basis for him to make his
investment decision.
Identify the key elements of an assurance engagement in this scenario, if you
accepted the engagement.
June 1 What are the key elements of an assurance engagement?
2011
June 1 Briefly explain the key elements of an assurance engagement
2012
May 1a List the key elements of an assurance engagement.
2013
June 1b You, being a professional accountant in practice, have been approached by Mr.
2017 Rahin who wants to invest in Atia Foods Ltd. He has asked you for assurance
whether the recent financial statements of the company are reliable basis for him
to make his investment decision.
As you have accepted the engagement, identify the key elements of an assurance
engagement in this scenario.
Reasonable assurance engagement:
Reasonable assurance engagement is a high, but not absolute, level of assurance where the practitioner collects
sufficient and appropriate audit evidence and provides opinion in positive form. Example of positive
assurance is as follows:
“The Financial Statements have been prepared in accordance with applicable laws and accounting standards”

Limited assurance engagement:

Reasonable assurance engagement is a moderate level of assurance where the practitioner collects lower level
of audit evidence and provides opinion in negative form. Example of negative assurance is as follows:
“Nothing has come to our attention that causes us to conclude that the Financial Statements have not been
prepared in accordance with applicable laws and accounting standards”
Self-Test:

Year Q Question Mark Practice

No s (Yes/ No)
Dec 9b Under the “International Framework for Assurance Engagements,” how many types
2011 of assurance engagement a practitioner is permitted to perform? Define all.
June 1 What are the types of assurance engagement as per the International Framework
2012 for Assurance engagements.
Dec 2b What are the types of engagement as per definition given by IFAC?
2013 What conclusions are given against those engagements?
June 1d For the purpose of giving opinion you have to follow Bangladesh Standards on
2015 Auditing (BSA).Discuss the terms `Reasonable assurance engagement’ and
`Limited assurance engagement’ as mentioned in the BSA.
Dec 1b What are the types of engagement as per definition given by IFAC? Explain.
2015
June 1a How many types of assurance engagements are identified in the International
2017 Framework for Assurance Engagements?
Year Q Question Mark Practice
No s (Yes/ No)
June 2 In Bangladesh, the auditor will normally express his audit opinion by reference to
2010 the ‘true and fair view’, which is an expression of reasonable assurance. Briefly
define the terms ‘true’ and ‘fair’.
Dec 2c The auditor normally expresses his audit opinion by reference to the ‘true and fair
2013 view’, which is an expression of reasonable assurance.
Define the term ‘true and fair.
Dec 1c What is the meaning of Auditors’ normal expression of “true and fair” in any audit
2015 report which denotes a reasonable assurance?
Dec 1a What is the meaning of auditor’s normal expression of ‘true and fair view’ in any
2017 audit report which denotes a reasonable assurance?
Year Q Question Mark Practice
No s (Yes/ No)
June 1b What are the factors, which make a person ineligible for being a company auditor
2015 as per the Companies Act, 1994? What non-audit services are prohibited to be
carried out by auditors?
Year Q Question Mark Practice
No s (Yes/ No)
Dec 1 Which three of the following are benefits of assurance work
2010 • An independent professional opinion
• Additional confidence given to other related parties
• Testing as a result of sampling is cheaper for the responsible party
• Judgments on estimates can be conclusive
• Assurance may act as a deterrent to error or fraud
Dec 2d The key benefit of assurance is the independent and professional
2013 examination carried out by the auditor during the course of the audit. In
addition, assurance gives some subsidiary benefits.
List subsidiary benefits those are provided by the assurance providers.
Dec 1d What are the key benefits of Assurance in any audit done by the Auditors?
2015 List down the subsidiary benefits those are provided by the assurance
providers.
Dec 1b The key benefit of assurance is the independent professional verification
2016 being given to the users. In addition, assurance gives some subsidiary
benefits. What are those subsidiary benefits?
June 1c In an assurance engagement there are several subsidiary benefits available
2017 to other parties, although the assurance report is not addressed to such
parties. Briefly describe these subsidiary benefits.
Self-Test
Past Questions:
Year Q Question Mark Practice
No s (Yes/ No)
Dec 1 ‘Assurance can never be absolute’. Discuss the limitation of assurance.
2010
June 5 A key issue for accountants is that there are limitations to assurance
2012 services, and therefore there is always a risk involved that the wrong
conclusion will be drawn. What are the limitations of assurance services?
Dec 2e What are the limitations of assurance services for which the auditor
2013 cannot give a certificate of absolute assurance or correctness?
May 1c ABC Co. is a private limited company. The company is planning to go for
2015 IPO in September 2015. The Managing Director of the company asked
you, as auditor for last 3 years, to give an absolute assurance report for
last 5 years that his company is showing increasing trend in sales and
profits. Can you as a practitioner give absolute assurance? Give
reasons for your answer.
Dec 1e Certificate of absolute assurance or correctness” cannot be provided due
2015 to some limitations. What are those?
Dec 1b ‘Certificate of absolute assurance or correctness’ cannot be provided due
2017 to some limitations. What are those limitations?