The Institute of Chartered Accountants of Bangladesh

Sample Multiple Choice Question (MCQ)

Course Name: Assurance
Chapter 01: Concept & Need for Assurance

Prepared by: Abdullah Al Mamun, FCA (En # 1142)

1. How many parties are involved in an assurance engagement?

(a) Two Parties

(b) Three Parties
(c) Four Parties
(d) Five Parties

2. Who is the responsible party in an audit engagement?

(a) The board of directors

(b) The shareholders
(c) The audit firm
(d) The audit client

3. Which of the following is the subject matter of an assurance engagement?

(a) Data Financial statements

(b) Systems or processes
(c) Behavior
(d) All of the above

4. Which of the following is an example of assurance engagement?

(a) Bank audits

(b) Fraud investigations
(c) Pension scheme audits
(d) Internal audit
(e) Due diligence

5. Which of the following is the subject matter of an audit engagement?

(f) IFRS and IAS

(g) Financial statements
(h) ISA
(i) Internal control system

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6. Which of the following are the relevant criteria for preparation of subject matter
of an audit engagement?

(a) ISA
(b) IAS
(c) IFRS
(d) (b) + (c)

7. Which of the following parties are involved in an audit engagement?

(a) Shareholder
(b) Auditor
(c) Board of Directors
(d) All of the above

8. What is the objective of an audit?

(a) To provide an audit opinion

(b) To judge the management’s honesty
(c) To identify fraud and error
(d) All of the above

9. There are ________ types of assurance engagement:

(a) Two
(b) Three
(c) Four
(d) Five

10. In a reasonable assurance engagement a high, but not absolute level of

assurance is given.

(a) True
(b) False

11. In a reasonable assurance engagement how an opinion is expressed?

(a) Negatively
(b) Positively
(c) Disclaimer
(d) None of the above

12. In a limited assurance engagement a moderate level of assurance is given.

(a) True
(b) False

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13. The key difference between reasonable assurance engagement and limited
assurance engagement is:

(a) The evidence obtained

(b) The type of opinion given
(c) (a) + (b)
(d) None of the above

14. Which of the following is an example of positive opinion:

(a) In my opinion, the statement by the Chairman regarding X is reasonable.

(b) In the course of my seeking evidence about the statement by the
Chairman, nothing has come to my attention indicating that the
statement is not reasonable.
(c) (a) + (b)
(d) None of the above

15. Which of the following is an example of negative opinion:

(a) In my opinion, the statement by the Chairman regarding X is reasonable.

(b) In the course of my seeking evidence about the statement by the
Chairman, nothing has come to my attention indicating that the
statement is not reasonable.
(c) (a) + (b)
(d) None of the above

16. Under the concept “True and Fair View” True means information is factual and
conforms to reality, not false.

(a) True
(b) False

17. Under the concept “True and Fair View” Fair means information is free from
discrimination and bias in compliance with expected standards and rules.

(a) True
(b) False

18. As per Companies Act 1994 who can do an audit in a company in Bangladesh?

(a) A member of ICAB

(b) A member of ICMAB
(c) A member of ACCA
(d) All of the above

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19. As per Companies Act 1994 an officer or employee of a company can be the
auditor of that company.

(a) True
(b) False

20. Which of the following is the benefit of assurance:

(a) Independent, professional verification being given to the users.

(b) It enhances the credibility of the information.
(c) An assurance service may act as a deterrent.
(d) An assurance report cannot be able to draws attention to the deficiencies
in an information.
(e) It adds to the reputation of organizations and even countries.

21. Audit can

(a) Act as a deterrent

(b) Enhance credibility of financial information
(c) (a) + (b)
(d) None of the above

22. Assurance can never be absolute and assurance providers will never give a
certificate of absolute correctness.

(a) True
(b) False

23. Which of the following is the limitation of assurance:

(a) The fact that testing is used.

(b) The accounting and internal control systems have inherent limitations.
(c) The fact that most audit evidence is persuasive rather than conclusive.
(d) The fact that assurance providers rely on the responsible party and its
staff to provide correct information.
(e) The fact that some items in the subject matter may be estimates and
therefore uncertain.
(f) The fact that the client’s staff members collude in fraud which can be
easily identified by assurance providers

24. The expectation gap means a gap between what the assurance providers
understands he is doing and what the user of the information believes he is
doing.

(a) True
(b) False

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25. The users of assurance report need to close the expectation gap as far as
possible in order to maintain the value of the assurance report to all
stakeholders.

(a) True
(b) False

26. Who needs to close the expectation gap?

(a) Management
(b) Auditor
(c) Board of Directors
(d) All of the above
27. The expectation gap may be narrowed down by:

(a) Engagement Letter

(b) Expanding the audit report
(c) (a) + (b)
(d) None of the above

28. Statutory audits conducted in Bangladesh must be conducted in accordance with

ISAs as issued by IAASB. ISAs are made up of:

(a) Introductory material and definitions

(b) Objectives
(c) Requirements
(d) Application and other explanatory material

29. In common with other assurance engagements, an audit will comprise several
stages along the way to its eventual completion and the issuance of the auditor’s
opinion. Which of the following three are included under states of an audit?

(a) Obtaining the engagement

(b) Planning
(c) Setting materiality
(d) Review and completion
(e) Risk assessment

30. Which three of the following are benefits of assurance work?

(a) An independent, professional opinion

(b) Additional confidence given to other related parties
(c) Testing as a result of sampling is cheaper for the responsible party
(d) Judgments on estimates can be conclusive
(e) Assurance may act as a deterrent to error or fraud

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