Certified Government Auditing Professional (CGAP) Practice Exam

Which type of engagements does IFAC's international framework cover?

1. Consulting engagements.

2. Preparation of tax returns without assurance conclusions.

3. Assurance engagements, whether reasonable or limited.

4. Only reasonable assurance engagements.

The correct answer is: Assurance engagements, whether reasonable or limited.

The framework established by IFAC (International Federation of Accountants) is primarily designed to address assurance engagements, which include both reasonable and limited assurance. Assurance engagements are integral to providing stakeholders with confidence in the reliability of financial information or other forms of reporting. Reasonable assurance engagements involve a higher level of scrutiny and require the auditor to gather sufficient evidence to provide a moderate to high level of assurance regarding the financial statements or reports. On the other hand, limited assurance engagements generally offer a lower level of assurance but still serve an important role in validating the integrity of the reports analyzed. This comprehensive nature of the IFAC framework ensures it covers a wide range of activities within the assurance spectrum, making it vital for maintaining standards in auditing practices globally. Other types of engagements mentioned, such as consulting engagements or tax return preparations, do not fall under the specific scope of the assurance engagements outlined by IFAC, as they do not primarily focus on providing assurance regarding the veracity of financial information.