1.

Why should "Auditing and Assurance Principles" be part of a Bachelor of Science in

Accountancy degree program? List your reasons.

The incorporation of Auditing and Assurance Principles in the BSA Degree Program is
essential as it helps to strengthen the essential skills needed in today's business
environment. Audits will remain to be in high demand for a long time and CPAs will
keep performing audits as long as there is a demand for timely and accurate
information. Accountancy students must consequently be knowledgeable in the subject of
auditing standards, particularly auditing and assurance related activities as well. It
introduces accountancy students towards the responsibilities of an external auditor, the
audit planning process, and in particular, recognizing an audit client, analyzing its
internal control, checking its processes and controls, performing an analytical testing,
substantive procedures, and formulating the suitable audit report.

2. What is assurance? What are assurance engagements?

Assurance is the process of checking that the data in a company's accounting record are
in accordance with accounting standards and principles, as well as confirming whether or
not the accounting records are correct.

Assurance Engagement is an engagement conducted by a practitioner/professional to

allow oneself to give an opinion regarding the measuring of a particular subject against a
criterion. Practitioner’s statement of opinion enhances the trust of the people over the
measurement of a particular subject depending on the criteria applicable under
evaluation.

3. What is the objective of an assurance engagement?

The objective of assurance engagement is to gather adequate suitable evidence to convey

a conclusion, with acceptable or restricted assurance, about whether the audited entity has
complied with the stipulated requirements of the applicable legislation in all material
aspects.

4. Enumerate the five elements of assurance engagements. For each element, provide a brief
explanation.

Existence of a Three-Party Relationship, usually consists of the intended users, the

client's management, as well as the auditors in most audit engagements. The targeted
users are the stakeholders of the client who will obtain and use the auditors' assessments.
It includes, above all, the company's owners, or shareholders.
 Subject Matter, is the material provided by the party responsible. It is also the material as
to which auditors are expected to evaluate. Depending on the type of assurance
engagement, the subject may change. The financial statements generated by the client's
administration are usually the subject.

Suitable Criteria, the parties involved also must set appropriate criteria for practitioners
to use in evaluating the given subject matter. Financial criteria that clients must adhere to
while compiling their financial statements are usually included in the agreements.

Sufficient Appropriate Evidence, practitioners cannot authenticate the data supplied in a

specific subject matter without such evidence. As a result, every assurance engagement
must have sufficient appropriate evidence to support the data provided.

Written Assurance Report, it is the result that the client obtains and that the practitioner
provides to the client. As previously stated, the practitioner evaluates the subject matter
considering specified criteria and collects adequate and relevant evidence. Based on this,
they produce a written assurance report expressing their view on the matter.

5. Explain why suitable criteria are essential to the successful performance of an assurance
engagement.

Sustainable criteria are essential to the success of assurance engagement for sustainable
criteria serves as a basis of comparison for a reasonably consistent assessment or
evaluation of a subject matter.

6. Define the following:

o Reasonable level engagements, In a reasonable level engagement, the practitioner

obtains enough relevant information to determine that the subject matter complies
in all material aspects with defined suitable criteria, and issues a positive
assurance report.
o Limited level engagements, While under a limited level engagement, the
practitioner obtains enough suitable information to reach the conclusion that the
subject matter is plausible with the conditions and issues a negative assurance
report.
o Attestation engagements, Is an agreement with a client in which a third party
outside examines, analyzes and reports about the client's subject matter.
o Direct engagement, Is an assurance engagement wherein the practitioner assesses
the inherent subject matter against applicable criteria with the goal of obtaining
adequate reliable data to convey a conclusion to intended users aside from the
party responsible about the results of that assessment in a written direct assurance
report.
7. Is absolute assurance possible? Explain.

Absolute assurance is not possible when the auditor is unable to gather adequate and
relevant information to provide a 100 percent assurance that the financial statement is
free of errors. Limited resources and time, constraints in the client's system of internal
control are all reasons why auditors cannot give absolute assurance.

8. What is attestation? Give examples of attest engagements.

Since attestation provides an opinion, it is considered as a type of audit. Attestation

service or engagement is the practice of employing a CPA to offer attestation audits over
services such as reviews or exams and agreed upon procedure reports.

9. Identify at least three non-assurance engagements. Describe each one briefly.

Consulting or Advisory Engagements, such as tax and management consults.

Related Services, such as agreed upon engagements.
Tax Services, such as preparation of tax returns where no conclusion conveying
assurance is expressed.