Assurance services typically involve how many parties, and who are they?

• A. Two — auditor and auditee
• B. Three — auditor, auditee, stakeholders
• C. Four — auditor, auditee, stakeholders, regulator
• D. One — auditor

Answer: (B)

In assurance engagements, three parties are involved: the practitioner who performs the assurance, the entity being assessed (the auditee) that provides the information, and the users who will rely on the assurance report (stakeholders). This structure explains why the answer is that the engagement typically includes the auditor, the auditee, and the stakeholders. The regulator isn’t a built-in party of every assurance engagement, though regulators may be involved in specific contexts. For example, an independent auditor assesses a company’s controls and issues a report for the board and investors.