Month: August 2025

The following is an extract from an independent accountant’s unmodified report on a profit forecast:

‘Based on our examination of the evidence supporting the assumptions, nothing has come to our attention which causes us to believe that these assumptions do not provide a reasonable basis for the forecast.’

Which one of the following best describes the type of assurance provided by this statement?

Select ONE answer:

1. Positive assurance expressed negatively
2. Negative assurance expressed positively
3. High level of assurance expressed negatively
4. Limited level of assurance expressed negatively

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > There are two types of conclusions which can be given: a conclusion expressed in positive terms and a conclusion expressed in negative terms. A conclusion expressed in negative terms is indicated by the phrase ‘nothing has come to our attention’, which indicates the restricted work carried out and hence the fact that the assurance is limited, as opposed to reasonable. Hence, this type of assurance is a limited level of assurance expressed negatively.

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In any assurance engagement, there are a number of parties involved.

Select which party receives the final report?

Select ONE answer:

1. Responsible party
2. Practitioner
3. User
4. The public

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == >    It is the responsible party that prepares the subject matter. The practitioner is responsible for gathering evidence. The user is the party who receives the final report.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

In any assurance engagement, there are a number of parties involved.

Select which party gathers evidence on the subject matter?

Select ONE answer:

1. Responsible party
2. Practitioner
3. User
4. The public

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > It is the responsible party that prepares the subject matter. The practitioner is responsible for gathering evidence. The user is the party who receives the final report.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

In any assurance engagement, there are a number of parties involved.

Select which party prepares the subject matter?

Select ONE answer:

1. Responsible party
2. Practitioner
3. User
4. The public

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > It is the responsible party that prepares the subject matter. The practitioner is responsible for gathering evidence. The user is the party who receives the final report.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following is NOT a benefit of an assurance report on financial information?

Select ONE answer:

1. enhances the credibility of the information being reported on
2. reduces the risk of management bias in the information being reported on
3. attests to the correctness of the information being reported on
4. draws the attention of the user to deficiencies in the information being reported on

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == >    An assurance report does not ‘attests to the correctness of the information being reported upon’. Even a reasonable assurance engagement (which gives more assurance than a limited assurance engagement) does not provide a guarantee that the information being reported on is correct. Assurance can never be absolute as this statement implies.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.