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SECTION A - CASE 1: AQUAPURIFY NGO
AquaPurify NGO is a global charity providing clean water infrastructure in developing nations. You are the audit manager at Grant & Co. The audit for the year ended 31 March 20X6 is being planned. The audit engagement partner, Sarah Jenkins, has been on the engagement for seven years. AquaPurify recently received a massive government grant that requires a separate assurance report. The charity's finance director, a former Grant & Co audit manager who left the firm 18 months ago, has offered the audit team a complimentary luxury safari trip 'as a thank you for their hard work'. Furthermore, Grant & Co has been asked to provide internal audit services to AquaPurify.
Which of the following correctly identifies the ethical threat created by Sarah Jenkins serving as the engagement partner for seven years, and the appropriate safeguard?
ACCA · Question 05 · Audit Framework and Regulation
SECTION A - CASE 1: AQUAPURIFY NGO
AquaPurify NGO is a global charity providing clean water infrastructure in developing nations. You are the audit manager at Grant & Co. The audit for the year ended 31 March 20X6 is being planned. The audit engagement partner, Sarah Jenkins, has been on the engagement for seven years. AquaPurify recently received a massive government grant that requires a separate assurance report. The charity's finance director, a former Grant & Co audit manager who left the firm 18 months ago, has offered the audit team a complimentary luxury safari trip 'as a thank you for their hard work'. Furthermore, Grant & Co has been asked to provide internal audit services to AquaPurify.
Regarding the separate assurance report for the government grant, which of the following best describes the difference between reasonable assurance and limited assurance?
SECTION A - CASE 1: AQUAPURIFY NGO
AquaPurify NGO is a global charity providing clean water infrastructure in developing nations. You are the audit manager at Grant & Co. The audit for the year ended 31 March 20X6 is being planned. The audit engagement partner, Sarah Jenkins, has been on the engagement for seven years. AquaPurify recently received a massive government grant that requires a separate assurance report. The charity's finance director, a former Grant & Co audit manager who left the firm 18 months ago, has offered the audit team a complimentary luxury safari trip 'as a thank you for their hard work'. Furthermore, Grant & Co has been asked to provide internal audit services to AquaPurify.
Regarding the separate assurance report for the government grant, which of the following best describes the difference between reasonable assurance and limited assurance?
Answer options:
Reasonable assurance provides absolute certainty, whereas limited assurance provides a high level of assurance.
Reasonable assurance provides a high level of assurance expressed positively, whereas limited assurance provides a lower level of assurance expressed negatively.
Reasonable assurance is expressed negatively, whereas limited assurance is expressed positively.
There is no difference in the level of assurance, only in the format of the report.
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