ACCA AAA INT Syllabus F. Other Assignments - Levels of Assurance - Notes 1 / 2
Reasonable Assurance is where there is sufficient evidence that the subject matter agrees to certain criteria.
It is a high level of assurance
It is Positive Assurance (This means that in their opinion the subject has been prepared in accordance with the criteria required)
An example is the external audit
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Limited Assurance is where there's sufficient evidence that the subject matter is plausible in the circumstances
It is a moderate level of assurance
It is a Negative Assurance (This means that in their opinion there is nothing to suggest that the subject has not been prepared in line with the relevant criteria)
An example is a review engagement
Here, the auditor reviews the financial statements using less evidence than required by an audit
It is not an audit.
The report will not be to the shareholders but to the body that commissioned the review e.g. Bank, Directors.
Remember!
A Review Engagement gives Negative Assurance
An Audit Report gives Positive Assurance
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