aaa316_actsols.pdf - Chartered Accountants Program Audit Assurance ACT Activity 1.1 Identifying assurance engagements Solution Determining whether the

aaa316_actsols.pdf - Chartered Accountants Program Audit...

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Chartered Accountants Program Audit & Assurance Unit 1 – Activity solutions Page 1-1 ACT Activity 1.1 Identifying assurance engagements Solution Determining whether the five key elements of an assurance engagement are present Engagement or other service Three-party relationship Appropriate subject matter Suitable criteria Sufficient appropriate evidence Written assurance report 1. Reporting on store turnover AAA Partners Directors (or equivalent) Landlord Store turnover is the underlying subject matter Store turnover report is the subject matter information (outcome) As determined by the lease agreement Evidence obtained from performing procedures appropriate to the agreed level of assurance (e.g. agreeing information in the store turnover report to the accounting records) Review or auditor’s report – depending on the agreed level of assurance 2. Compliance with risk management policies AAA Partners Management – responsible for compliance Directors (or equivalent) Risk management activities is the underlying subject matter Management’s statement as to compliance with risk management policies is the subject matter information (outcome) Internal risk management policies Risk management documentation, enquiries and observations Review or auditor’s report – depending on the agreed level of assurance 3. Valuation services AAA Partners Directors (or equivalent) No third party The roofing business subject to valuation Accounting Standards or other measurement basis n/a n/a – valuation reports provide no assurance 4. Assisting with developing corporate strategies AAA Partners Directors (or equivalent) No third party No identifiable subject matter n/a n/a n/a – scenario does not indicate whether a report will be provided aaa31601_actsols_03
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Audit & Assurance Chartered Accountants Program Page 1-2 Activity solutions – Unit 1 ACT Determining whether the five key elements of an assurance engagement are present Engagement or other service Three-party relationship Appropriate subject matter Suitable criteria Sufficient appropriate evidence Written assurance report 5. Reporting on adherence to environmental laws and regulations AAA Partners Directors (or equivalent) Regulatory bodies Environmental activities is the underlying subject matter Environmental reports to regulatory bodies is the subject matter information (outcome) Relevant environmental laws and regulations Evidence obtained from performing procedures appropriate to the agreed level of assurance (e.g. obtaining understanding of controls embedded in the business processes to ensure compliance with the environmental laws and regulations) Review or auditor’s report – depending on the agreed level of assurance Recommended approach The steps outline the recommended approach for successfully completing this task.
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