Free CIA-2 flashcards

What distinguishes an assurance engagement from an advisory engagement?

Assurance rests on a three-party relationship (process owner, assessor, user) and an objective evaluation against suitable criteria, so reliant users can trust the conclusion. Advisory work is shaped with the client to add value and produces no independent opinion for third parties.

In an assurance engagement the auditor advises management, and management stays free to reject the recommendations offered.

This is tempting because advice is common in audit work, but it describes advisory work; assurance involves an independent assessment against criteria, not optional advice.

When judging the reliability of an evidence item, what is the primary factor to weigh first, and why does it matter?

The independence of the evidence source. Reliability rises with the independence and objectivity of the source, because a party with no interest in the outcome has little incentive to distort what the evidence shows, unlike an internal owner or the audited vendor.

A verbal assurance from the process owner is the most reliable evidence because it comes directly from the person accountable for the control. Why is this wrong?

Tempting because the owner is accountable, but oral evidence from an interested internal party is among the least reliable forms and needs corroboration.

What does appropriate engagement supervision primarily give reasonable assurance about?

Through direction, review, and oversight it gives reasonable assurance that engagement objectives are met and that the workpapers adequately support the conclusions and results communicated. It is a quality mechanism, not a reporting or control-design function.

Does supervision give assurance that the auditors in charge design the operating controls management will later implement?

No. Designing operating controls would breach independence and objectivity; supervision never extends internal audit into owning management's controls.