ACCA Advanced Audit and Assurance (AAA) Practice Exam

What is an 'assurance report' in the context of assurance engagements?

1. A detailed audit plan

2. A written opinion issued to the intended user

3. A summary of all financial statements

4. A regulatory compliance document

The correct answer is: A written opinion issued to the intended user

An assurance report is a written opinion issued to the intended user, providing a level of confidence regarding the information that has been examined during the assurance engagement. This report communicates the findings of the auditor regarding financial statements, internal controls, or any other subject matter relevant to the scope of the engagement. In the context of assurance engagements, it is critical for stakeholders to receive a clear and concise report that supports decision-making, based on the auditor's professional judgment and evaluations. This written opinion not only signifies the degree of assurance provided (reasonable or limited) but also adds credibility to the information presented to users, helping them to understand the reliability of the data. The other choices do not accurately describe an assurance report. For instance, an audit plan is an operational document outlining the auditor's strategy and approach to conducting the audit, not a report. A summary of financial statements would not encapsulate the evaluative nature of an assurance report, which extends beyond mere summarization to providing professional insight. Lastly, a regulatory compliance document may relate to compliance with laws and regulations but does not align with the nature of assurance reports, which focus on independent evaluations rather than mere conformities.