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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Specific assignments

Zeta & Co, a firm of auditors, is engaged by Orion Ltd's bank to carry out specified procedures on Orion's receivables ledger and to report the factual findings. Zeta will not give any opinion or conclusion on the receivables balance. Which statement best describes this engagement under International Standards on Related Services?

This is an agreed-upon procedures engagement. The practitioner carries out procedures agreed with the engaging party and reports only the factual findings, giving no opinion or conclusion and therefore no assurance. Users of the report form their own conclusions from the findings.

  1. AIt is an agreed-upon procedures engagement, where the report is restricted to factual findings and no assurance is expressedCorrect
  2. BIt is a limited assurance engagement, where a negative form of conclusion is given
  3. CIt is a reasonable assurance engagement, where a positive opinion is given on the receivables balance
  4. DIt is a compilation engagement, where Zeta assists management in preparing the receivables schedule

Explanation

In an agreed-upon procedures engagement the practitioner performs procedures agreed with the engaging party and reports factual findings. No assurance is expressed, and users draw their own conclusions. The limited assurance option is wrong because no conclusion is given at all.

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