ACCA Advanced Audit and Assurance (AAA) Practice Exam

What is the aim of an assurance engagement?

1. To enhance the company's reputation

2. To gather evidence for regulatory compliance

3. To increase the confidence of intended users regarding an evaluation outcome

4. To provide a general overview of the business's operations

The correct answer is: To increase the confidence of intended users regarding an evaluation outcome

The aim of an assurance engagement primarily focuses on increasing the confidence of intended users regarding the evaluation outcome. Assurance engagements involve the systematic process of obtaining evidence and providing an independent assessment of the subject matter, which could range from financial statements to compliance with regulations. By performing such engagements, auditors or practitioners provide a level of assurance to stakeholders that the information they are receiving is reliable and free from material misstatement. This increased confidence derived from assurance engagements is crucial for decision-making by users of the information, who may include investors, regulators, creditors, or other stakeholders depending on the context of the engagement. The independence and professionalism of the auditor play a significant role in reinforcing this confidence, as intended users can trust the findings have been reached through a rigorous and objective process. In contrast, while enhancing a company's reputation or gathering evidence for regulatory compliance can be seen as beneficial outcomes, they are not the fundamental aim of an assurance engagement. Likewise, providing a general overview of a business's operations does not capture the essence of what assurance engagements are intended to deliver, which is a specific assessment based on evidence.